After a massive stock market crash in 1929, the entire world struggled through the Great Depression for roughly ten years. While we have experienced a few recessions in recent decades, we luckily have never endured such devastating economic conditions since that time.
But that doesn’t mean we can’t still learn important lessons from the struggles of previous generations. People who lived through the Great Depression were often noted saying that although times were tough, they found a way to make it through. Many even experienced happiness during this time, something that is a bit humbling to those of us who consider ourselves a bit luckier, financially speaking.
While we probably don’t need to prepare for a depression any time soon, these lessons can be applied to our own lives today. It’s important not to live beyond our means, and to find ways to be a bit more thrifty and save more money for retirement.
Wants versus needs. These days, few of us stop to consider the difference between wants and needs. It’s completely fine to indulge in some “wants”, but understanding the difference can help to keep spending in line with a reasonable budget.
Use cash. Most of us are a bit too quick to whip out the credit card these days. Unless it’s an emergency, you probably don’t need it if you can’t pay cash for it!
Don’t waste food. Current statistics on food waste highlight the indulgences of modern life; one third of food produced for human consumption each year goes into the trash. One culprit is our widespread restaurant culture, at which portions are often far too large. However, we’re also responsible for throwing away food at home, too. Depression-era folks would be horrified by this behavior. While we don’t necessarily need to be as thrifty as they were, we can all cook at home a bit more and remember to use our leftovers.
Save for an emergency. Those who lived through the Depression learned that a small windfall should be saved, rather than spent on an indulgence, because another rainy day could be right around the corner. We don’t need to deprive ourselves of every luxury, but the wisdom of establishing an emergency fund should not be overlooked.
Find joy in simple things. Ask your neighbors what makes them happy, and they might list things like their new boat or their vacation to Aruba last year. There’s nothing wrong with that, but these days, our happiness has become so dependent on expensive purchases that we forget to enjoy the simple things in life! As you learn to change your thinking, you might find that you don’t need to spend as much money to find happiness.
Of course, saving a bit more money is only the first step to a more secure financial future. Deciding what to do with that savings is Step Two! Give us a call, and we can help you decide how to plan for your retirement.