History repeats itself, so it’s wise to learn from the mistakes of the past…especially when it comes to our finances. While we’d like to believe that we won’t face another period of severe economic upheaval like the Great Depression, it could possibly happen again. Americans suffered through the Great Recession of 2008-2009, and many are struggling to overcome the financial hardships caused by the pandemic.
We never know what the future holds. So, take heed, and keep reading for money-saving tips from the Great Depression.
1. Live Below Your Means
The Great Depression began with the U.S. stock market crash in October 1929 following a decade of American prosperity. The problem with the so-called prosperity of the 1920s was that people lived beyond their means. History.com explains, “Credit was extended to many so that they could enjoy the new inventions of the day, such as washing machines, refrigerators and automobiles” [source].
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2. Cook for Yourself at Home
During the Great Depression, Americans quickly discovered the importance of cooking meals at home to save money. The same idea still applies today. Eating out is a luxury. You wind up spending significantly more to eat the same meal and drink the same wine at a restaurant than you would at home. Plus, the recipes you find on Google are better than a lot of the overpriced food in restaurants.
If you really crave a restaurant meal, do a search for copycat recipes and cook the dish at home.
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3. Build and Grow Your Emergency Fund
We’ve all heard stories about those who lived through the Great Depression hiding cash under their mattresses or even burying it in the ground. This is because the banks failed. But it is also because people realized the necessity of having an emergency fund.
Those without one wound up homeless and lived in shanty towns after they lost their jobs and their meager savings ran out. It doesn’t have to be that way for you when you grow your emergency fund.
- Related: 9 Essential Dave Ramsey Money Tips
4. Get Out of Debt Now
Debt is still a major problem in America. According to Debt.org, “On average, each household with a credit card carries $8,398 in credit card debt” [source]. That’s why one of the best money-saving tips from the Great Depression is to get out of debt ASAP.
Think of it this way – even though times are hard, you are still responsible for your debts. For example, those who were in debt before the Great Depression were those who suffered the most when it happened. That’s why you have to cut expenses, live below your means, and get out of debt now.
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Part of the reason so many Americans are in debt is that they are paying ridiculously high interest rates on their credit cards — even those with good credit scores. The amount they are paying in interest makes it nearly impossible to pay down the card in a timely manner if you make just the minimum payment.
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- Related: 7 Habits of People Who Are Debt-Free
5. Work a Side Hustle
During the Great Depression, people were desperate to make money and were willing to do anything to get money. Many took on odd jobs, in addition to their day jobs, to help make ends meet. You can do the same thing. Don’t let your ego get in the way of making money. Take any opportunity – even if you feel the work is “beneath you.” Do whatever it takes to take care of yourself and your family so you can stay out of debt.
Find a Side Hustle through Steady
A fast and easy way to find a side hustle is with the free Steady App. Steady is an online marketplace for jobs. Create a free profile, and Steady uses its smart matching technology to share your profile with employers seeking your specific skills. It’s one of the easiest ways to find opportunity.
So don’t waste your free time looking for a side hustle.
6. Start Investing for Retirement Now
Retirement wasn’t an option during the Great Depression. Statistics from censuses around this time reveal “63.1 % of men ages 65-74 were in the labor force in 1930” [source]. We all want to retire – especially when we are no longer physically able to work to the same degree. But, if you haven’t invested in your future, this may not be possible.
It’s uncertain whether we can count on Social Security benefits, and pensions are all but a thing of the past. Plus, we never know if or when we will face another Great Depression. That’s why it is vital to take every opportunity to find ways to turn your spare change into dollars for your future.
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The word “investing” scares some people, but Acorns makes it so simple that you don’t even have to think about it. Acorns is perfect for those just beginning their investment journey. Acorns scoops up the extra change from your everyday purchases (like all those excess acorns that fall from trees) by automatically rounding up your purchases to the next dollar and then invests the extra money into stocks.
Acorns also offers Acorns Later, a special feature just for retirement savings. Acorns Later will recommend an IRA and portfolio based on your financial picture, and then you set up automatic recurring contributions.
7. Don’t Participate in the Next Recession
When you start to use these money-saving tips from the Great Depression, you will put yourself in a better position to avoid the same financial mistakes many of our great-grandparents made.
Lower your expenses! Do whatever it takes to keep your expenses lower than your income. Ask yourself if there’s anything keeping you in your home, or can you downsize to a smaller house? Can you take on roommates? Rent out part of it on Airbnb? Is there anything keeping you in your city, or can you move somewhere with a better cost of living?
Make smart choices today to protect yourself tomorrow so you will never participate in a recession again because you took the steps to be financially secure.
Save More Money! Check these out next…
- 6 Habits of People Who Are Never Broke
- 8 Tips to Drastically Cut Monthly Expenses
- 42 Frugal Tips to Live Below Your Means
Save Money At Your Favorite Stores:
- 6 Walmart Shopping Tips (online + in-store)
- 5+ Amazon Hacks Every Prime Member Should Know
- 9 Ways to Save Money at Target
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Michelle Salater is a freelance finance writer with a passion for personal finance education. When she’s not in front of her computer, she’s reading biographies and exploring remote areas of the world. She also freelances for Wooster Media Group LLC.