16 Depression Era Money Saving Tips
We are often told that the current financial meltdown is the most serious since the Great Depression. And while that may be true, comparing today’s times to such an awful and demoralizing crisis has the effect of scaring people, thereby making the situation worse. This is the wrong way to react to the situation. Rather than passively absorbing fear and uncertainty, we would do well to remember that some people managed to stay afloat during the Great Depression - and to learn how they did it. In that vein, here are 16 Depression-era money saving tips and how they can be utilized today.
Pay Yourself First
Without a good-sized chunk of money stashed aside, there is literally nothing standing between you and financial disaster. While you may manage to chug along the way things are now, the slightest change (a sudden spike in credit card rates, temporary loss of income, etc.) could send you reeling. That being said, it’s no surprise that paying yourself first by continuing to save was a common trait of people who survived the Great Depression. You should do the same today, no matter how uncomfortable or counter-intuitive it feels at the time.
Only Buy What You Truly Need
Together with regular savings, buying only necessities forms the bedrock of the Depression mentality to surviving economic turmoil. You can bet that when people were jumping out of skyscrapers because their net worth evaporated overnight, the people who held it together were not blowing their money on excesses. Similarly, until you conduct a thorough inventory of your spending habits, methodically eliminate waste and ensure that you are only buying what you truly need to survive, you will not be as fortified from disaster as you could be.
Awaken Your Inner Bargain Hunter
Another defining characteristic of Depression survivors was their relentless spirit of bargain hunting. When money is scarce and the future uncertain, there is simply no excuse for paying full sticker price on any of your purchases. Such times call for a different mentality, one of price comparisons and serious research into where the cheapest prices can be found. Luckily, the Internet makes this task far easier for today’s consumers than Depression-era bargain hunters. A few minutes of research before making any major purchases will usually assure you of getting a better deal.
Avoid Debt Like the Plague
Today’s recession (much like the Depression of the 1930’s) was caused by excessive borrowing and debt. That being the case, it would be utterly foolish to exacerbate the problem by going into debt yourself (especially if you already have outstanding debt in the form of credit cards or loans.) Going into debt during a recession takes you from the frying pan into the fire, exposing you to the full wrath of collections agencies, ruined credit scores, and possibly even bankruptcy. Rather than allowing this to happen, adopt the Depression mentality: see debt as a plague to be avoided at all costs.
Discard Catalogs or Enticing Advertisements
It is well known by psychologists that one’s environment has a great deal of influence on their behavior. Interestingly, a survey of Depression survivors by the Healthcare Council of Illinois revealed that many of those survivors promptly threw away mail-order catalogs and other enticing advertisements as soon they arrived. It was (and still is!) much easier to stay on your chosen path of frugality when you are not constantly surrounded by ads for things you don’t really need. Heed this advice today and you will be less tempted to splurge!
Question Every Expense
Notwithstanding trust fund babies and lottery winners, people who survived the Great Depression didn’t do it by accident. One of their strengths was a refusal to accept any expense without tirelessly scrutinizing it. Only when it was determined that they were spending the least possible amount of money would they rest easy and pay it. You should adopt this same attitude with regard to any kind of services or ongoing fees that you pay, be it for insurance, home security systems, warranties, Internet connections, and even electricity. Haggle, negotiate, and shop around until you know it would be impossible for someone to spend less and still get what you’re getting.
Use Less Energy
One of the familiar stories of the Depression era is homeowners who turned their home thermostats down and bundled up in coats and sweaters around the house. It’s uncomfortable to imagine going to that extreme and no one gets excited about using less of something to save money. That said, there is no faster, more straightforward way to save money so far discovered. Rather than seeing it as a painful sacrifice, make a game out of it. See how much less of everything you can use without making life unbearably worse. You might be surprised at how frugal you can be (and how much you can save) with heating, lights, and gas!
Buy in Bulk - Intelligently
It’s no secret that buying in bulk can save you money by enabling you to take advantage of volume discounts. Unfortunately, it can also be taken too far, such that it actually costs you more money. Without careful discretion, you might wind up buying things you don’t actually need in bulk, because it’s in bulk, rationalizing that after all, you’re “saving money” on it. This completely defeats the purpose of buying in bulk, which is saving money on things you need to buy. Avoid this pitfall by only bulk buying necessities (ie, nutritious food) and not excesses (ie, 50 gallon drums of shampoo.)
Keep or Start a Garden
Cutting down on restaurant meals means eating more meals at a home, but if you have to buy all your food ready-made, you still wont be saving as much as you could be. That’s why many Depression survivors kept backyard gardens to grow fresh fruits and vegetables. While there is still the cost of seeds and maintenance (ie, water costs), this is far cheaper than buying from stores and ensures that food costs are kept to the absolute minimum
Move to Where the Work is
sourceA tragic fact of the Depression is how many people suffered by staying in stagnant areas when they could have (perhaps at a high cost) moved somewhere more prosperous. Don’t make that mistake today! Many of those who came out of the Depression financially intact had the prescience to see that the job outlook at home would only get worse and the courage to move somewhere else. If you have the opportunity to do the same, take advantage of it.
Develop Multiple Income Streams
It wasn’t called the Great Depression for nothing, but the gloom and doom we associate with it overshadows the fact that not everyone was hurting. Amidst all the mass suffering and despair, a small minority of people actually managed to thrive by diversifying and developing multiple income streams. You can do the same! Whether it’s investing (Warren Buffet says to be greedy when everyone else is fearful), starting a business, or picking up a second job, anything you can do to spread your risk across more than one thing will make you safer and more secure.
Spend Less to Entertain Yourself
A hallmark of Depression-era spending habits was spending less to entertain yourself. Rather than spending gobs of money on extravagant nights out on the town, people found joy in life’s simpler and less expensive pursuits - exercise, reading, or enjoying the great outdoors. While you may not be ready to cut all entertainment expenses out of your budget, you can at least buy your thrills wisely. Fly during non-peak times of the year, see matinee showings of movies, and split entertainment costs with friends in a group.
Buy Used
Buying used clothing is an extreme that many are unwilling to consider, regarding it as “going too far” and scoffing at the idea of ever doing it themselves. But the bare, crass fact is that new clothing is expensive, and when times are tough, the difference between spending $50 or $500 for a similar outfit could mean the difference between keeping the lights on or not. Depression survivors bought used clothing without shame, and if you are feeling the crunch, perhaps it’s time to consider following suit.
Don’t Pay Others For What You Can do For Free
While it’s true that nothing is truly “free” (there is the opportunity cost of your time to consider), in recession, it often makes sense to do yourself what you would normally pay others for. This includes everything from haircuts to lawn care to accounting and tax preparation. If you have an abundance of free time, spend it on tasks like these and avoid shelling out money for them.
Make Things Yourself Instead of Buying Them
You would be amazed how far a little ingenuity and resourcefulness will go in preparing your own food, stitching your own clothes, and making other things that you would usually buy. In addition to saving the money you would’ve spent, you will have the satisfaction of using the things you yourself created!
Pretend That You Are Worse Off Than You Are
People who lived through the Great Depression will tell you that your mindset and overall attitude was just as important (if not more so) than the specific money-saving strategies you used. It took a pervasive mentality of penny-pinching and getting as much from what you had as possible. The best way to cultivate this mentality? Just pretend that you’re broke. Even if you are not technically on the brink of financial ruin, pretending that you are will force you to make decisions differently and more prudently than if you assumed a more comfortable state of affairs.
Do you have other money saving/earning tips to get through the recession in tact? If so, please share them in the comments below.
Great blog post! We all should practice these strategies, even if we haven’t been downsize/outsized.
Good luck!
Comment by Lisa — April 8, 2009 @ 8:23 am
This is very true, i think that this will help people get back to the standard needs of live. we as a society are gluttons and it shows.
Comment by Philip — April 8, 2009 @ 12:16 pm
Great tips, thanks! Keep them coming!
Comment by Dave Rigotti — April 8, 2009 @ 2:04 pm
Great Idea, telling people to not spend money who have it will surely revive an economy badly in need of capital.Anyone who has money should spend it.
Comment by Shawn R — April 8, 2009 @ 3:52 pm
You are going to have to rely on these tips and more to survive given the changes to our society the Marxists of the Democratic party are doing to us! Heaven help us.
Comment by TI — April 8, 2009 @ 4:05 pm
Reading Neal Stephenson books will help anyone through anything. :)
Comment by Capissen — April 8, 2009 @ 4:17 pm
Shawn: I think you’ll notice that beyond some of the cost-cutting tips, we also mentioned suggestions such as developing extra income stream and even moving to where the jobs are located. Both of these will no doubt keep the revenue flowing. The tips really aren’t about hoarding everything and hiding in fear.. but they are simply about finding alternatives while protecting what truly matters (e.g., making the mortgage payment won’t become an issue).
Having said that, obviously some tips aren’t practical — heck, even relocating for jobs can be potentially risky and financially impractical. At the end, it’s all about finding what works for your particular situation.
Comment by BillShrink Guy — April 8, 2009 @ 4:18 pm
I want an electric meter thing like that–where does one get those? So cool!
Comment by Marianne Stabile — April 8, 2009 @ 4:19 pm
Marianne: I’ll search online for phrases such as “electricity usage monitor” - “energy cost monitor” - or other variations thereof. The spiffy one pictured above is from Scottish & Southern Energy, a British-based energy company. I haven’t really seen a retail equivalent in the states yet so if anyone else knows.. please chime in.
Comment by BillShrink Guy — April 8, 2009 @ 4:45 pm
i AM broke, so i have to act as if i’m rich, just so i don’t get too depressed
Comment by Andres Pereyda — April 8, 2009 @ 4:54 pm
Great (helpful) article that’s very applicable to the times we live in.
Comment by Mark Baker — April 8, 2009 @ 6:34 pm
Eat soups. Not only do you get all of your nutrients without gaining weight you have plenty to go around.
Comment by terry — April 8, 2009 @ 6:51 pm
Awesome article! All of these ring true for me. People get so caught up in the media and the haves and have-nots that they accrue massive credit debts. As a woman, I’d have to say that a savvy spender is now ranking on the top of my list for what one might find attractive in a partner.
Comment by K. Hill — April 8, 2009 @ 6:59 pm
Great site :)
Comment by Christine — April 8, 2009 @ 7:25 pm
thank you for publishing this!!!
Comment by am — April 8, 2009 @ 7:59 pm
Neat article, but stitching your own clothes these days is far more expensive than buying at a store.
Comment by Julia — April 9, 2009 @ 6:54 am
One more: learn to repair something (e.g. mechanic) and trade that service with someone capable of repairing something you have need to repair (e.g. computer tech). Bartered services rid huge chunks of tax.
Comment by Marty — April 9, 2009 @ 8:06 am
it true ~ but hardly to do it …
Comment by o ma ma — April 9, 2009 @ 10:16 pm
GREAT START,GOOD IDEAS, I ALREADY AM AN INNER BARGAIN HTR.,
I “WILL” DISCARD “MORE” CATALOGS ‘quicker’!!!
I DO CHECK RECEIPTS. SMART TO BUY IN BULK, I DO ‘SOMETIMES.’
I DO SOMETIMES BUY USED. I DO TRY TO DO IT MYSELF. I LIKE TO
SEW…JUST NEED TO FIND TIME.
I HOPE I AM PRETENDING I AM WORSE OFF THAN I REALLY AM…
WILL WATCH FOR FUTURE ‘TIPS’!
PLEASE, PLEASE, PLEASE DO NOT GIVE OUT MY WEB SITE..):
Comment by BARBARA 'T' — April 10, 2009 @ 12:38 pm
Car ( Mercedes E320 / 1994): sold ( still crying-lol)
Credit card: cut up too
Installed ENERGY STAR qualified lighting.( save up to more than 50%)
Cancelled all my pay-TV stuff
Food: no McD, Coke…….
Bought some gold and silver coins
Dont trust in government and the banks !!!!
Comment by Joe — April 11, 2009 @ 2:28 am
Exellent article! But the “reason” for the depression was not something mistical, it was designed. Watch “The Money Masters” on Youtube. Lays it out book, chapter & verse exactly what has happened since fall of ‘08, published in 1996…All central banks are privately owned, thus the future is no mistery at all. Tip #17…don’t let the bastards grind you down!
Comment by Rock — April 12, 2009 @ 8:06 am
The last one helps a lot and is something I’ve been doing for years.
Comment by Andrea — April 13, 2009 @ 1:10 pm
I am always reading articles such as this and they are helpful. The current economy has caught up with the rest of the world, it kicked me to the curb about 3 years ago…literally. my husband was injured and unable to work and my daughter was struggling with a chronic emotional and physical illness. I had been dignosed with cancer 3 years before and thank goodness won that battle physically. If we had not had 2 insurances that illness would have taken us down $$wise. My daughters illness was not covered to much of an extent. After a year or so we finally qualified for assistance for her bills and her fathers whose injury was severe also. Hey the good news we are still alive, after bankruptcy, foreclosure and now divorce. What I really want to say is keep hanging on and loving each other. Find ways to keep giving your kids hope. We moved into a rental owned by a friend. I could have found something cheaper but it is a big farmhouse with open skys and my soul feels more free hear and we have a HUGE garden. It made me feel wonderful being able to give fresh vegetables to my friends and feed them to my family. Look for the good in everything and support and protect your family with thing that cost little or nothing.
Comment by kelly — April 15, 2009 @ 1:29 pm
go dumpster diving. it has saved my family many hundreds of dollars. oh, and it takes things that would otherwise end up in a land fill.
Comment by Anonymous — April 16, 2009 @ 11:05 am
My gosh, this is amazing. Add to this list the need to avoid active management fees from your money manager. Instead, go index funds for now and avoid the plus 1% taxed against your funds.
Comment by Mikko — April 16, 2009 @ 11:32 am
Like the scouts say be prepared. If you have a job be a better worker, there’s 100’s more that will do it and for less pay. So suck it up and not be negative, it may not get better for some time.
Comment by bill r. — April 18, 2009 @ 10:53 am
This is such a great site. I am currently doing a course at University called Family Resource Management and I have a project to do on “surviving” this recession. This information would be so helpful for my project.
Thank you for publishing this :)
Much of the younger generation seem to have difficulty following this advice and understanding its importance.
Comment by Rose — April 19, 2009 @ 5:03 pm
Lots of great tips, thank you. One thing I would add - try repairing things instead of buying a new one. I thought I would have to buy a new watering can when mine sprung a leak. My sister suggested repairing it with tub and shower caulking. It worked great! Duh, why didn’t I think of that?!
Comment by Betsy Bargain — April 23, 2009 @ 3:05 pm
Saw and article about your site in my Goodhouse Keeping magazine and here i am. I found your site to be really helpful to me. I’m on social security and i get some of my husbands pension, which isn’t much, and it’s really difficult to make ends meet. There are times i wish that the beginning of the month would come a lot faster then it does. Hopefully i’ll be able to use of lot of your suggestions. Thank you oh so much. Hope to reading more really soon.
Comment by Johanna Buckley — April 26, 2009 @ 5:53 pm
Hmmm.
I thought these ideas were obvious. I’m also surprised that people think the ideas are so new and exciting. Keep up the good work. It sounds like it’s needed.
Marc
Comment by marc — April 28, 2009 @ 11:46 pm
Saving money is hard for all of us and non of us feel like cutting back on our lifestyle but I have found a good saving without loosing anything. I canceled my cell phone contract and bought a prepaid Tracfone and now I am saving about $35 per month and I am still making the same number of calls. I then was able to cancel my land line because Tracfone gives me long distance and international calls to about 60 country’s for the same rate as a local call. The savings are going half towards paying off debt and the other half to an emergency savings account.
Comment by Meshia — May 8, 2009 @ 6:18 am
[...] you worked to earn those dollarsInclude income tax when determining how much it costs to buy things16 Depression Era Money Saving Tips - Shrinkage Is Good takes us back in time to provide Depression-proof money saving tips. The list [...]
Pingback by * How To Save Money - The 1,001 List Of Money Saving Tips And Ideas — May 13, 2009 @ 6:55 pm
I lost so much money. I didn’t know it was invested in AIG and the banks, supposedly safe blue chip places. What I have learned is that if you die then there are less mouths to fee d and less bodies to clothe. This leaves more money for my family members and that’s the best way to help them.
Comment by Jim Orrison — May 22, 2009 @ 2:33 pm
Great article. My grandmother always said, “Use it up, wear it out, make do, do without.” I’ve followed this advice all my life, and I’m sure glad now I have. I don’t look so eccentric now. You don’t have to buy everything you see. Buy what you absolutely must have to keep body and soul together and SAVE THE REST!! Avoid debt like the plague. If you can’t afford a car then WALK or take public transportation. Think before you spend. Great article–much can be learned from the Great Depression era.
Comment by Janie Eddins — July 2, 2009 @ 1:44 pm
I loved these tips. I was wondering, does anyone know, how can we stop having junk mail delivered to our mailboxes? It distracts me to see pretty pictures of stuff I seriously want but cannot afford at all. Is there someplace we can call and quit it from being delivered at all? We get at least a half dozen fliers a day and its too much trash anyway. I will check back incase anyone knows…
Comment by j. — July 28, 2009 @ 1:19 pm
To be honest if you want to say money dont do anything lol.
Try to limit on everything, food, car, shopping and buy what you need not what you want. Also just keep looking onwards to pay day.
Comment by Jonny — September 13, 2009 @ 4:45 am
thank you. One thing I would add - try repairing things instead of buying a new one. I thought I would have to buy a new watering can when mine sprung a leak. My sister suggested repairing it with tub and shower caulking. It worked great! Duh, why didn’t I think of that?!
http://johnteshblog.typepad.com/john_tesh_blog/2009/09/what-makes-these-three-moneysaving-tips-so-amazing-theyre-nobrainer-ideas.html
Comment by Anonymous — October 24, 2009 @ 5:31 am