Sunday, September 12, 2010

What I learned from the Depression Generation, part 1

My 85 year old aunt passed away a couple of weeks ago. I probably had more contact with her than any of my other relatives, mainly because one of her daughters is my age. Whenever my family came to visit Grandma, which we did yearly, I spent a few days with my cousin. When we went to college, we roomed together. And when she went home for the week-end, I went with her. After all, home for her was 1 1/2 hours away. Home for me was 1300 miles away. So my aunt became a surrogate mother, giving me chores along with her own kids, and treating me like one of the family. They lived in an old farm house on a small farm. She never set out to teach me things, she just lived life and I watched. And learned. Since her passing, I have thought a lot about what I learned from her. A lot of it had to do with being frugal.

About the time my aunt passed away, my youngest son was home visiting for an hour or so. I had been out running errands, and suddenly realized, "Oh, I forgot to cash my check." DS asked me who gave me a check. I told him, "Nobody, it is my check. I just need to cash it so I have grocery money for next month." "You mean you write a check out to yourself?" When he continued to look at me puzzled, and then asked me why I didn't just make a withdrawal, I started to realize we had a bit of a generation gap going on. My kids seldom carry much cash, they rely on debit cards mostly. If they need cash, they go to the ATM. I have never actually used an ATM (I know, I am terribly old-fashioned, and a bit of a techno-phobe). And what I need to cash a check for to run our household on a cash basis, is more than the ATM limit is, anyway. After all, I am getting cash for food, gas, household expenses, allowances, entertainment, gifts, etc., for the next month. We have also been woeful failures as parents when it comes to teaching them to balance their checkbooks. No amount of explaining seems to get through to them; they just don't "get" it. Why should they balance their checkbooks, when they can just look on-line for their balance? I can talk until I am blue in the face about outstanding checks that don't get cashed for extroardinary amounts of time, and they just roll their eyes at me. But how can you manage your money well, unless you know how much you have?

So I am going to make a series of posts commenting about some of the things I have learned from my aunt, and others who lived through the depression. My grandparents were adults during the depression, and my parents, aunts and uncles, and my husbands parents were children/youth during the depression. It probably didn't affect them as much as their parents, but they learned certain attitudes and ways because of it. My dad used to say that he knew they didn't have much money, but nobody else did either, and they never lacked for food--because they lived on a farm and could grow their own food. But even in that semi-insulated situation, he learned frugal ways from his parents that he passed on to me.

Probably the most important thing I have learned from my elders, is to have the money for what you want, before you buy it. In other words, don't go into debt unless you have to. What a novel concept! The credit card companies would melt like the wicked witch in Oz if everyone in the country decided not to borrow what they can't pay back that month. You know, Visa and Mastercard are fairly new inventions. When I was a teenager, most people had a gasoline credit card, and maybe a department store card or two. When I first heard about the bank cards, I couldn't fathom how one card could be good at so many places. We've come a long way since then, and not for the better. It is common for college students to have thousands of dollars of debt before they graduate, for things that are long gone, like pizza and soda. It is so easy to think, I can pay it off later. But then something else comes along that we want, and something else, and next thing we know, we owe too much to pay off that month. And we quickly dig ourselves a hole that is difficult to get out of again. The depression generations I knew made sure they had the money before they bought something, except maybe cars and houses and college educations. But if the kids needed new shoes, they saved up and then bought the shoes. If they didn't have the money to go out to eat, they didn't go, they ate at home. When I was a child, we looked forward to payday, because sometimes we got to go out to eat at our favorite restaurant, and it was a real treat because it didn't happen often.

When I got married, my husband had a Mastercard. I was so impressed that he was that financially savvy. He had my diamond ring paid for before the wedding. Now, we were very frugal newlyweds, but we were both going to college, only supported by his part-time job, and pretty soon there was a baby on the way. We started to look at that credit card as a form of a student loan. It got us through college. But there was a trap there, too. We started shopping only at places that took our card (not everyone did). And we often bought a little extra, since we didn't have to come up with the cash. I remember the day we bought a gallon thermos jug, just because it was on sale. We used that jug for 20 years, but at that time it wasn't a necessity, and it went on the card. When DH finally graduated and got a job, we decided it was time to pay off that credit card, but by then we owed several hundred dollars, and it wasn't an easy process. It wasn't until DH changed jobs, and had a payout of his retirement account, that we were able to pay off that card. Since we were so young and still starting out, we decided it was best to use that retirement money to pay off the debt, and from then on to live on a cash basis. Yes, we do have a credit card, and we do use it on larger purchases, but we pay it off EVERY month, without fail. We are determined to never be in that position again, of having a debt we struggle to pay off. We had finally learned from our own experience that we should pay attention to the examples of those wise elders who had lived through the depression and really knew how to handle money.

Watch for more posts on the lessons learned from the Depression Generation.