Great Depression Mentality

I’m certain like most of our readers, I’ve been trying to digest the gravity of the financial crisis. Even being at the top of our financial earnings, we are still feeling the hit. I wouldn’t even want to think about the impact on those who have found themselves overextended and perhaps out of job. I’ve been there, and it isn’t pretty. Now is certainly not a good time to deal with such a circumstance.

The current financial crisis makes me think back to the impact that the great depression has had on many of our elders. My grandparents certainly kept a depression era mentality through their their lives. Around ago seventy, my grandparents sold a piece of farmland that had been encroached by developments for $1.5 Million.

Even with the funds invested well and giving them $100k annual throw-off without touching the principle, their lifestyle changed in no way at all. They still clipped coupons, bought shoes from K-Mart, and went about their lives as usual.

At the time I was in college and had been working two jobs to pay for tuition, room & board myself. When I asked if they could help to pay anything, I was told that if I couldn’t pay for it myself I should quit college. You might call it tough love, but I think it came from a perspective that going through the great depression instilled in that generation.

Now I wonder if there will be a shift in our own thinking about finances. I recall the high of the real estate boom in DC and talking to people about the possible fall in prices. It was like chicken little saying the sky would fall. There was obviously a false sense of security in the ever rising real estate market.

There may be a silver lining in all of this. What if, people really got the impact of living on credit and beyond their means? What if, people began to save?

There are certainly lessons to be learned in this mess. I just hope that we will be smart enough to learn them.