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].
You can avoid the same mistake by living below your means. Only buy what you need and have the cash to pay for it. Instead of buying something new, follow this Great Depression money-saving tip: “Use it up, wear it out, make do, or do without.”
Grow Your Wealth Every Month with Empower
If you struggle with buying things you really can’t afford or spending money you don’t have, Empower will help you reign in your spending. This financial app has everything you need to make empowered financial decisions. For example, should you spend your money on a new sofa? Empower allows you to see your entire financial picture, including when you are close to going over budget, as well as your savings goals.
Plus, instead of using up every last penny each paycheck on stuff you don’t need, The Empower AutoSave feature will analyze your income and set aside excess cash for savings so you can grow your wealth instead of going into a hole.
“Help me stop being poor!”
Here are the facts. The *only* way to save money is to spend less than you earn. There’s no way around it.
So what does this mean for you? It means you need to either decrease your expenses or increase your income.
We want to help you do both. Join our 6-day Savings-Account Accelerator Workshop. We’ll send you expense-lowering tools and techniques (and even a few tips on how to boost your income). These frugal-living hacks will help you accomplish the cardinal rule of personal finance: keep your income over your expenses.
When you can spend less than you earn, your money will grow. You will build your savings, pay down debt, and save for retirement.
Join our free 6-day Savings-Account Accelerator Workshop, and start growing your wealth today.
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.
When You Shop for Groceries, Use Ibotta to Get Cash Back
Get even more money in your pockets when you download the Ibotta app for grocery shopping. After you shop for the ingredients for your home-cooked meals or copycat recipes, snap a picture of your receipt using Ibotta and get free cash.
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.
Build Your Emergency Fund with Empower
Don’t save your money under a mattress. It isn’t safe, and it isn’t an effective way to build an emergency fund. But Empower is. With Empower, you can quickly and easily build an emergency fund.
Empower allows users to automate savings weekly so you don’t have to think about it. Instead, you can rest easy knowing your emergency savings fund is continuously growing, thanks to Empower.
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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.
Pay Off Debt Now with Credit Land Balance Transfer
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.
The good news is that you don’t have to be stuck in this vicious cycle! Credit Land Balance Transfer makes it easy to find credit cards that offer lower interest rates (sometimes as low as 0% for 12-18 months) so consumers can transfer all their credit card debt to a more efficient credit card and pay off the balance quicker. Your interest rate will be determined by your credit score.
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 ZipRecruiter
A fast and easy way to find a side hustle is to create a free profile on ZipRecruiter. ZipRecruiter is an online marketplace for jobs. Both employers and job seekers can use the site. For example, you create a free profile, and ZipRecruiter uses its smart matching technology to share your profile with employers seeking your specific skills.
For example, if you are a skilled writer and list this skill on your profile, ZipRecruiter will send your profile to employers searching for writers. Plus, you can search and apply for jobs quickly and easily using the app.
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.
Investing for Retirement Is Simple with Acorns
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
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No Money in the Bank?
If you struggle to save money, it’s because you don’t know how to do it. Start growing your wealth every month with our 6-Day Free Workshop.
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.