A recession is defined as a temporary decline which trade and industrial activity are reduced, resulting in a fall of the nation’s gross domestic product (GDP). While these economic terms can be highly technical, recession boils down to mass financial hardship, and intimately impacts the lives of the nation’s masses. Throughout the strife, economic hard times have proved the strength of American resilience.
The economy is constantly unraveling new challenges and changes to American lives. From the Great Depression to the COVID-19 pandemic, Americans have been forced to learn new lessons on finances and frugality. The money lessons we learn throughout times of struggle are essential survival skills, and we must keep what we have learned close to us.
So, what did we learn through times of national financial adversity? Let’s take a look back at some recent economic recessions and the lesson’s we’ve learned along the way.
The Great Depression
The stock market crash of 1929 was absolutely devastating to the economy. In addition to the market crash, the year of 1929 saw the collapse of world trade, bank failures, and the collapse of the world money supply. By 1930, 4 million Americans were looking for work to no avail, and the number of unemployed workers rose to 6 million by 1931. The Great Depression was the biggest blow to the economy in all of American history, and the lessons we have learned from this time have been passed down for generations.
Here are some of the habits and wisdoms we’ve adopted since the Great Depression.
We can thank those who survived the Great Depression for our best frugal lifestyle tips. It’s essential to live within our own means. Take care of your belongings, eat at home, and do it yourself whenever you can. We learned that less is more and that less can be enough.
Relocate if Necessary
Go where work is. Don’t be afraid to branch out and take a risk for a better life.
Give Back to Your Community
We aren’t in this fight alone. Be generous, and care for those around you. Find comfort and strength in your community.
The Great Recession
We remember this one well. The 2007-2008 collapse of the housing market was caused by insufficient regulation of greedy bank’s subprime mortgages. This economic crash left more families in homeless shelters and at risk of homelessness than ever before. It took years for the economy to completely recover, but we will never forget what we’ve learned along the way.
Here’s what we can take away from the Great Recession.
Save Whatever You Can
We need to be prepared for emergency. You never know what could happen that you can’t control. Saving your heard earned money should be your top priority for your financial protection.
Take your credit seriously and protect it at all costs. You don’t want to be caught in major debt if an emergency arises.
Knowledge is Power
Your financial education is your survival in a capitalist society. Get smart and learn everything you can about your finances. Read the fine print on every contract, and don’t be fooled by a those with bad intentions.
The COVID-19 Recession
After the Great Recession of 2008, the American economy saw the longest period of expansion to date. The economy was growing from 2009 to February 2020, and this period of expansion was sharply ended by the COVID-19 pandemic. Over 9 million Americans lost their job during the pandemic, and US citizens heavily relied on government aid to survive the times.
We’re over two years into the pandemic, so let’s reflect. What financial lessons did we learn, and what are we still learning from the pandemic recession?
Find a Fair Employer
Throughout the pandemic, we learned that the companies we work for have a serious impact on our livelihood. Don’t settle for a bad gig when you don’t have to. Use your resources to find an employer that will compensate and treat you the way you deserve.
Investing is For Everyone
Saving is essential, but to really build your wealth you should be investing. Countless new investors started during, and it has never been easier for you to invest Investing isn’t just for rich people, it’s for you.
Get Help When You Need It
Don’t be ashamed to ask for government assistance when you need it. Asking for help is a necessary aspect of survival, and there are several programs deigned to do just that. Use your resources and accept financial help when necessary, you’ll get through it.
Things to Remember
The lessons we learn through hard times may be the most important things we ever learn. Protect these pieces of knowledge and pass them down to future generations. Never forget these essential money wisdoms.
- Be frugal and live within your means
- Protect your credit
- Save what you can, but don’t forget to invest
- Ask for help when you need it and give back to your community