On top of all the other ways the COVID-19 pandemic has turned our lives around, now we have to worry about a possible economic collapse. First, we reacted to the virus. Now, we have to prepare for the aftermath. However, taking a look at how families survived the Great Depression, as well as the 2008 recession, we can learn how to prepare should things take a turn for the worst.
Following the booming Roaring Twenties, the Great Depression drastically changed the way Americans lived. From 1929-1939, America suffered through the worst economic collapse in history. According to The Balance, “The stock market crashed on Black Thursday. By the following Tuesday, it was down 25%. Many investors lost their life savings that weekend.”
It didn’t end there. At its lowest point, in 1933, roughly 15 million Americans were unemployed (we were a smaller nation then of only 125 million people) and nearly half the country’s banks had failed. Those who were lucky to stay employed sadly saw their wages cut in half. As a result, Americans were forced to change the way they lived and earned.
Fortunately, America has not suffered another economic collapse like the Great Depression. But we have had close calls, like the economic recession of 2008. This particular recession devastated the banking and real estate industry. The History Channel explains, “The crisis led to increases in home mortgage foreclosures worldwide and caused millions of people to lose their life savings, their jobs and their homes.”
Now, in 2020, we are facing another potential economic collapse as a result of COVID-19. As the world came to a stop to prevent the spread of the virus, the economy also came to a sudden halt. The U.S. stock market has fallen at times to lows last seen during the 2008 recession. Harvard economist Kenneth S. Rogoff claims, “This is already shaping up as the deepest dive on record for the global economy for over 100 years. Everything depends on how long it lasts, but if this goes on for a long time, it’s certainly going to be the mother of all financial crises.”
Even so, economists remain hopeful. They believe that this recession will be short-lived, and, as life returns to normal, so will the economy. Yet, as COVID-19 has shown, we do not know when the next disaster will strike that will wreak havoc on the economy. But no one can predict the future. The one thing we have control over is how we prepare should the economy tank even further.
What we can learn from survivors of the Great Depression
History proves that Americans are resilient and resourceful people. These traits are what helped us survive the Great Depression. For example, people did not starve even though they didn’t have much money – they were resourceful and found other ways to put food on the table.
The way Americans survived an economic crisis of that magnitude was by changing their mindsets and their habits. Gone were the days when they could buy what they wanted when they wanted it. Instead, America’s motto became, “Use it up, wear it out, make do or do without.” Everything from the clothes they wore to the food they ate modeled this kind of resiliency and resourcefulness.
In a time when we have gotten used to getting everything we want almost instantly, it is wise to take heed of the lessons our grandparents or great-grandparents learned during the Great Depression. If there is another economic collapse, our survival will depend on how well we listened to their advice. Rather than becoming fearful and hiding money under a mattress, let’s look at the things our ancestors learned to do to protect themselves during financially trying times.
Know how to stretch a dollar
One of the most effective ways to survive an economic crisis is to know how to stretch a dollar. During the Great Depression, people were very aware of the value of a dollar. Therefore, they opted not to spend money if they didn’t have to. Instead, they looked for every opportunity to stretch a dollar and make whatever they purchased last longer.
During the Great Depression, multipurpose items were sought after. Families discovered they could use a product like cornstarch for multiple purposes, such as cooking and cleaning. Similarly, families realized they could extend the life of a dollar by making meals that required fewer or less expensive ingredients, such as soups. Another behavior change (and this is an important one) was that they did not use more than what was needed. For example, they used “just a dab” of product, such as shampoo or cleaning products, rather than a handful.
Know how to grow and find your own food
Additionally, people boosted their chances of survival by knowing how to hunt, fish, and forage for food. Some families opted to raise chickens (see our Survival Scout on poultry), which regularly provided them with protein sources. These skills proved to be extremely helpful during times of economic disaster.With food prices climbing and a possible meat shortage on the horizon (see last week’s Survival Scout), it is important to look at what those living through the Great Depression did for food. Thrift gardens and kitchen gardens became a popular means for putting food on one’s table. Growing their own fruits and vegetables saved them money and they were less dependent on grocery stores. You can get started growing your own food with a Survival Seed Vault. This seed vault contains 21 varieties of USDA Certified Organic Heirloom Seeds, which can last 5+ years in proper storage.
Because families knew how quickly things could change, they also learned the importance of stocking up on essentials. One reporter explains, “Growing up through the Depression on an Iowa farm, my grandmother’s family never knew if the next harvest was going to be successful. She once said that it seemed that if they weren’t struggling through a drought then they were struggling through a flood.” As a result, his grandmother feels safer to this day with a stockpile of canned goods in the cellar.
Whether you learn to can your own food or prefer to buy a pre-assembled Three-Month Emergency Food Supply, the goal is to have food on hand in case of an emergency, such as an economic collapse.
Know how to repair, reuse, and be resourceful
With the motto, “Use it up, wear it out, make do or do without,” Americans understood the importance of being resourceful. That’s why they made efforts to repair items themselves rather than paying someone else. For example, instead of buying new clothes, women became pros at sewing clothing for their families. They took their resourcefulness a step further by finding ways to be resourceful with their materials, such as using flour sacks to make dresses for little girls.
Likewise, Americans did not simply throw things away. They looked for ways to reuse items, whether it was fabrics for clothing, goose feathers for bedding, or bones for soup broths. Nothing went to waste. Try to think about this lesson the next time you head to the garbage can – what are you throwing away that can be reused?
Know how to be a good neighbor
During disaster situations, you need your neighbors. This was incredibly true during the Great Depression, as people learned to look out for one another. For example, church potlucks were popular during this time because it was a way to share food with neighbors.
Being neighborly also provided an opportunity to barter goods. When the banks closed down, it left people without access to cash. Therefore, they turned to bartering goods and services to make ends meet.
Know how to live with less
Possibly the biggest lesson we can learn from the survivors of the Great Depression is how to live with less. Most of us have more than we actually need and use our money to buy what we want. By shifting our thinking from what we want to what we need, we can protect ourselves financially – before an economic collapse.
During the Great Depression, families made necessary cuts that enabled them to survive, such as choosing to walk rather than owning a car. They might have wanted a car, but they didn’t need one. Similarly, they might have wanted to go to the movies, but they didn’t need to. So, they chose to gather with neighbors and play cards instead.
In our own lives, we might want the cable sports package, but do we need it? We might want unlimited Wi-Fi on our mobile devices, but do we need it with so many public spaces offering free Wi-Fi? While there is nothing wrong with these choices when you have the means, during times of financial upheaval, it is necessary to learn how to live with less by focusing on your needs, not wants.
Make wise choices with your money, friends.
Preparedness Advisor, My Patriot Supply