When I was a kid and whined, as most kids are apt to, about how hard my life was, a man I knew, DJ, would tell me about his youth in Faribault, Minnesota during the Great Depression. He was just a young boy in 1930 and lived with his parents who were farmers. But lack of rain and lack of work did their dirty deeds and after getting loans in attempts to keep the farm, his parents eventually lost the homestead and most of their possessions. His mother also lost her mind. His father turned to alcohol. DJ told stories about going to bed with the deep pangs of hunger in his belly, wearing shoes with the toes cut out of them, getting beaten for stealing corn from a neighbor's farm when he and his brother had gone without food one day too many, his wealthy aunt who committed suicide leaving behind several young children who were taken to an orphanage and never heard from again and other horrors. He had nothing positive to say about those years but again, he was just a kid and his family had fallen apart. He grew up to be a money-obsessed man who would stop at nothing to get what he saw as the elusive key to happiness and he ended up bitter and alone.
My husband's father, James, grew up in Marthaville, Louisiana and told stories, too. Percy, father of James, lost his land in 1929 and took off for Cleveland, Texas taking his two youngest sons with him. James turned 18 in 1930 and boarded in another family's home. And he and the remaining brother were industrious. There had been a cotton crop planted on the land Percy lost and James and his oldest brother slipped in and tended to the crop until it made cotton. Then they picked it and hauled it to the cotton gin where they sold it. James went to Shelby County, Texas and stayed with relatives, logging and working for chicken farmers. His oldest brother went to Sabine Parish, Louisiana and worked in the oil fields. Percy and the two youngest boys stayed gone three years and when they returned, Percy just wondered around visiting relatives and playing fiddle at dances and the two younger boys went into the logging business. At the beginning of WWII three of the boys joined the Army. James was the one who didn't. He came out of those tough years as a tough man. I'm sure his experiences influenced him but his family managed to stay intact for the most part and pulled together to survive. He raised two sons alone and never got rich but made a comfortable living and a nice home for his sons.
When my husband was in the seventh grade and studying the Depression, he asked his Dad what it was like. What James told his young son went something like this:
"Well, we didn't hear about it for two or three years. There wasn't much money around but nobody had any money before then. Jobs got a little scarce but we all logged, cut cross ties, and everybody grew their own gardens. We just traded stuff amongst each other. If we needed a horse, we'd trade corn or a plow to someone who had one. We hunted for rabbits and deer and we made out pretty good. Towards the end of it, it got hard to get shoes. If you had a pair of shoes, most of the year you didn't wear 'em unless you were on a date. We didn't even wear 'em when we worked."
James and his brothers logged for a living...barefoot, and walked 25 miles to town...barefoot.
So what's the point in my telling all this? Both men experienced the same basic situation in their youth but the outcomes were different for them and their families. There were some basic differences like the ages of the two men and miscellaneous family details but the two families handled the stresses differently.
Most of us are going through some very tough financial times and things are going to get worse before they get better. But now isn't the time to panic. Instead, take action. Stay calm and use your head and if you haven't done so yet, prepare for tough economic times. And remember that it can always be worse.
First, get and keep your priorities straight. Keeping a roof over your head, food on the table, and clothes on your back are the basic priorities. Your kids might not like it but they'll survive and be appreciative of the food, even if it is just beans. They might not be appreciative until they're 25 but at some point they will be. And they'll be grateful for parents who set a good example.
If you're experiencing financial problems or anticipate them, talk to your kids about it. You needn't give a lot of detail but don't keep kids in the dark. Even a six year old can understand money being scarce and just telling them money is tight is often enough. Give what you think they can handle but do include them, at some level, in the situation.
Do what you can to keep your home but know this: if you lose it, it isn't the end of the world. After 12 years of paying on our house and land, we lost it in late 2007 and though I wish we hadn't gone through that, we survived and have a lot less stress now. Foreclosure isn't a good thing but it isn't the worst thing, either. A house is just a house. The people inside it are more important.
Formulate a plan for a potential layoff or time of decreased income. Update your resume, figure out how much money you need monthly to get by, do a little networking, explore the possibility of a career change, take some college classes, learn a new skill or two, call in favors, etc.
If you haven't started accumulating cash, start. I mean right now, don't wait. If you can only put aside $5 a week, do it. Surely there's something you can do to get more cash or to spend less in one or more areas so you can put that amount aside - sell books online, have a garage sale, clean houses, mow yards, cut out the cable, switch to dial up (yuck, I know!!), forgo the manicure, magazine, or latte, hang clothes outside to dry, reduce or eliminate eating out, quit smoking, etc. It doesn't hurt to get your kids involved in such things, either. If they earn/save/don't spend $10 a week, thats less money they need from you and they learn valuable lessons in money management and family values.
Along with increasing cash, decrease your debt if possible. Personally, I think if you're facing a potential layoff having living expenses for a few months is more important than paying on debt but beyond the three basics listed above everyone needs to prioritize for themselves. I've been in the position of having little income and no savings and feeling I had no choice but to live on credit. At the end of a few months I still had little income and no savings but I owed several thousand dollars on one credit card. I never want to be in that position again so if I don't have cash to buy something I don't get it. Dave Ramsey's envelope system really got me going good in that department. It's simple, easy to understand and it works if making it work is a priority. On the other hand some people might feel more comfortable with paying more on debt and having less cash in hand. This is definitely a matter of preference and the only right way is the one that makes you comfortable. Find your way and follow it.
Don't incur new debt. Don't charge christmas presents or meals out for visiting family. In fact, don't charge anything. Get rid of the credit cards, put them in a bowl of water in the freezer, lock them in a safe deposit box, do whatever you have to but don't use them! For me, this is a huge priority, right up there with the basics. In fact, it is a basic in my book. We haven't observed christmas in over 13 years but even if we did, I feel so strongly about not acquiring new debt that I'd eat beans and rice and not buy a single gift before I'd charge anything.
If you have room for a garden, get your seeds (use heirloom seeds), and supplies, get the garden planned, and be ready when planting season arrives. If you don't have land enough for a garden, consider a container garden. With containers, some soil, seeds, and sunlight you can grow at least some of your food and if you're really blessed, might be able to preserve some of it for later use. If you have no means to garden, consider working out a deal with someone who does. Mow their yard or run their errands in exchange for produce. Don't be afraid to ask! If you can't garden or work out a deal to barter with someone who does, keep your eyes open for great deals on in season fruits and vegetables at the local store. Talk to the produce manager to get the best price on a case of this or a bushel of that and preserve what you get. Canning isn't hard but freezing and drying are often sufficient.
And finally, when the going gets really tough and you feel sad or depressed over the situation, remember this - you don't walk barefoot 25 miles to town. I know that doesn't help pay the bills but it really could be much worse than what it is. Just muddle through and be thankful for your friends and family and keep those priorities straight so you don't end up being used to make a point in someone's blog entry.