Swati Banerjee

Great Depression Era Strategies For Saving Money The Great Depression was an extremely difficult period for everyone across the world, especially in American countries. Unemployment reached to 25 per cent in the United States and most people’s bank savings were wiped out. People started migrating to other countries in search of livelihood. Farmers started migrating in false hopes believing that the situation in neighbourhood countries was better. People who have survived the Great Depression have embedded in them habits that they find hard to change. They refuse to part with anything that might come in handy at any point of their life. To them, chopping the ends of breads is not a good idea and scraping the wrapper off a block of cheese certainly is. The situations were such that, even when the Great Depression left, people continued with their old habits. During this difficult time, people learnt smart budgeting by doing more with less. The Great Depression in America lasted for more than a decade and people of that generation developed budgeting strategies that work even today very effectively. Talking from a financial viewpoint, there’s definitely a lot we have to learn from our elders who have survived the difficult life in the past. Here are a few tips that our grandparents and great grandparents have used in their lifetime to survive the Great Depression. 1. Reuse, Reduce, Recycle and Repair Our grandparents are experts in repurposing things that are already owned once. Recycling plastic bags by using them as trash bags and making use of old tee-shirts and socks as rags are some amazing hacks to be learnt from our elders. This is an excellent strategy for saving money. Instead of spending money buying new stuff every now and then, recycle and reuse is one technique that proves to be very beneficial for saving money. 2. Pay cash more often During the Great Depression in America, people didn’t have enough savings in their bank account and hence, they used cash for making any buy / sell transaction. Using this strategy, if we choose to pay with cash, we will be saved from unwanted debts. 3. Try to be self-sufficient Americans adopted this strategy during the Great Depression by doing all their tasks individually themselves. Sewing one’s own clothes, growing food on own farm, cooking from scratch are some strategies they adopted to save money. They mastered these skills for saving their precious budget money. We have to learn the same from them for effectively bringing budgeting into our lives. If you are not familiar with any of these skills, try learning them from the internet, books etc. and this can definitely come in handy 4. Planning budget in a diary / envelope Grannies of then did not have electronic gadgets to keep track of the budget and hence they used diaries and envelopes for portioning the cash budget of the expenses. You can still use the traditional method of maintaining a diary by starting with planning how much you want to spend each month for each category, namely clothing, transport, food etc. You can maintain several envelopes, each dedicated to a category and start putting the amount you allocate for each. Use the money from each envelope for that purpose alone. This is a very helpful strategy that we still can adopt for budgeting. 5. Buy Used things instead of New If you are really serious about saving money, you will have to do so in every aspect of your purchases. You can save a lot of bucks by buying used stuff instead of new which include automobiles, toys, clothing and so on. Barter System, which was a common practice during the Depression Era, is an excellent example for us to save money. You could trade some of your skills in exchange for some fresh produce from a neighbour’s garden. 6. Weigh your wants and needs It is essential to get your needs fulfilled, however, it is not important for you to satisfy all your wants. Americans learnt to differentiate between their wants and needs during the Great Depression. If they did not have something, they learnt to live without that. Similarly, follow suit here. If you already have something that meets your basic needs but you are looking to buy better than that, continue to use it instead of buying it anew. For instance, wear clothes you already have instead of buying new ones, use that 2 year old mobile phone if it works well instead of getting yourself the latest one. This strategy is one of the most effective ones also shared by several financial and budgeting experts. As quoted by Warren Buffet, “If you buy things you don’t need, you will soon sell things you need” this strategy holds true in the case of saving. 7. Try your hand at freelancing Even if you have a full time job, earning some extra bucks is always a great idea. Many people back in the 1920s and 1930s did freelance work such as selling photographs and home cooked food. If you have a special skill or hobby, go ahead, showcase that and earn some money as a passive income to keep the flow going. Today, there are many websites catering exclusively to freelancers, giving them the opportunity to sell their work online. 8. Plant those seeds for a lush garden Every time you get vegetables or fruits home, do not forget to remove the seeds from some of them, dry them out and replant them in your own garden. This helps in keeping your garden going all through the summer and hence, you don’t have to spend money buying veggies or fruits elsewhere. Americans used this method of growing seeds in their own farms back in the era. 9. Let all the members of the family contribute That’s exactly what Americans during the Great Depression Era did. Of course, if you have small children, they wouldn’t be able to contribute. However, you and your spouse should be on the same level when it comes to earning. Both should do their bit when it comes to taking up the financial burden of the whole family. 10. Scrape till you drop Yes, you read that right. Back in the 1920s, people never let go of even a single drop, off their ketchup sauce, tooth pastes, shampoos etc. They made sure that they scraped the bottles to the last bit. You definitely can save a lot by using everyday items to the last drop. The saying that goes “Drop by drop forms a river” is very apt to be quoted here. Surviving the Great Depression was a struggle, in fact a nightmare for millions of people. But the tips and strategies people of that generation have left behind are valuable. They lead life using whatever little means of survival they had and thereby their lifestyle is exemplary. Their strategies for saving money are applicable even today. The policies formulated today for the economy are based out of the wisdom gained during the era of Great Depression. The answer to the question that if the great depression can occur today is no, because the probability of such an event is unlikely. The policymakers of today will not be sitting idly and hence are now capable of making better decisions to protect the economy.