7 Frugal Living Lessons From The Great Depression Era

7 lessons we can learn from the Great Depression about money and frugal living!

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Chapters

00:00 Start Here
01:02 Debt Will Eventually Catch Up To You
02:36 If Things Seem Too Good To Be True, It’s Because They Are
04:13 Expect Good Times To Eventually End
05:38 Be Careful With Where You Put Your Money
07:11 Living Below Your Means Is The Only Sustainable Way To Live
08:42 No Matter How Little You Have, The Power Is In What You Do With It
10:11 Be Adaptable

We can learn a lot about money and spending habits from history. In this video I combine my passions of history and frugal living and explain 7 different lessons we can learn from the Great Depression.

1. Debt Will Eventually Catch Up To You

Before the Great Depression began, there was a time of economic prosperity called, "The Roaring 20s." This was a time when there was a huge shift in how people spent money. Before people would save up their money to buy something, but in The Roaring 20s people has access to receiving credit from banks and stores. This created the rise of modern consumer culture where people were more careless with their spending and took on a bunch of debt. Eventually, this caught up to people and they were unable to pay back their debts leading to the financial crisis.

2. If Things Seem Too Good To Be True, It’s Because They Are

Not only were people buying stuff in The Roaring 20s, but a huge amount of people began investing in the stock market. From 1922 to 1929, the stock market increased over 200% and people were investing a lot of money and investing money on margin. Eventually people started to realize that the market was overvalued and everyone started to withdraw their stocks. This created the market crash of 1929 leading to the Great Depression. Stocks became worthless, people lost their life savings, and faced a huge amount of debt. All the hype of the Roaring 20s was too good to be true.

3. Expect Good Times To Eventually End

Once the market crashed in 1929, life changed drastically for people, which was something no one expected. When times are good we often think they will last forever and spend carelessly, don't budget, and don't save for the future. Then when times get bad we are not prepared for it. All good things eventually come to an end and the people that hurt the most during a financial crisis are the people who did not prepare when times were good.

4. Be Careful With Where You Put Your Money

Once we entered hard financial times, people began rushing to the banks to withdraw their money; however, the banks did not have their money and many people lost their life savings. Eventually, however, the government created the FDIC, which secures our money. And although we have this organization, we can still face moments when we could lose all of our money like when FTX filed for bankruptcy. It is important to make sure you keep your money in a safe place.

5. Living Below Your Means Is The Only Sustainable Way To Live

We went from abundance to scarcity in this period of history, but neither of these ways of living are sustainable. Eventually when you live in one extreme you will live in the other. It is important to find the balance of living a frugal life where you are living below your means.

6. No Matter How Little You Have, The Power Is In What You Do With It

In the Great Depression, people were forced to be extremely cautious with their money because money was scare. People learned that the power of money is not with how much you make, but it with what you do with it. If you are frugal with your money, you can make it go a lot further.

7. Be Adaptable

The final lesson of the Great Depression is to simply be adaptable. During this moment of history people had to adapt in order to survive. And no matter what period of time you live in, you will face some hardship in your life, but what's going to determine how it turns out is your ability to adapt. Frugal living is a tool that allows us to adapt to whatever life throws at us.

Also...if you read this, let me know in the comments. I'm curious to see if anyone reads this! (I doubt it)

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[ElAgustin]

What's one lesson you learned in the 2008 recession?

[Raymondjohn]

I used to think everybody went broke during the Great Depression and other major crashes but they didn’t… Some made millions, I also thought everybody went out of business during these times but they didn’t, some went into business, there's always depression/recession for some people and there's always a good time for others, it's all about perspective.

[sarahuber]

It’s not what you make, it’s what you keep. So true!

[ellisfrazier]

What a history lesson! Things haven’t changed that much, and we can still learn today from the past! Thank you for the reminders!🎉

[kathiravand]

I was searching for meaning of life .. I got the answer from your videos . Thanks Austin Williams . Now I can enjoy the world without worries about making enough money .. enough money to keep me secure was the answer to my peaceful enjoying life ..u changed my belief ... Now I don't care about anyone advice .. living my life for the first time ..I think the best way to survive for future is have enough money, do agriculture for our own food and live a frugal life ....

[rntt]

I have my lifestyle down to under $18, 000 annually. That's everything, food, insurance, bills, gas, housing, everything. I haven't had any debt for two years now, and my house is paid for in cash. I am very proud of this. This year I'll clear well over $120, 000 and have put every extra dime either towards taxes, in the bank, or into working on my house.

[Truthtoat]

"Expect Good Times to Eventually End"

Brilliant

[KINGTHEYORKIE]

This was great I was listening to to it while driving home from work and didn’t spend money on dinner I cooked a delicious meal 🥘

[trishalou]

Excellent video. This is what I try to tell people. In the good times you need to prepare for the bad times. The bad times will surely come at some point.

[Revert]

“Focus on spending not earning”…if only I had known….

[wynanddutoit]

Once I am out of debt I am never making it again. Not even good debt.

[justnoticing]

Hi Austin, your video is a great reminder that things can change quickly and we need to have flexibility and skills to adapt if things turn bad really quickly. I have friends with family in Lebanon. The economy there collapsed a few years ago and now people's money is not worth anything. My friends used to send goods from Australia to support their relatives but now things are so bad that they are sending money. The cost of living has made it hard for them here, too, especially as the husband has been unable to work due to his health. You never know what life has in store and making hay while the sun shines can leave you in dire straights.

[bcusaaus]

I’m allergic to debt! Don’t want anyone making interest off me anymore. It’s time to bloody pay me interest off my savings/investments.

[valindawalsh]

Excellent video. You really knocked this one out of the park. My husband watched it and we will have our teenager watch it as well. Keep up the great work!

[mcdianer]

I have been binge watching you. Your content is clear and concise. I am learning a lot. I especially like your massage on flexible. I recently purchased an expensive home but I rarely eat out

[plappin]

What's unfortunate is that today the fixed costs of living are higher for most people than they were in the Great Depression leaving us MUCH more vulnerable to the vagaries of financial markets. We are more dependent on cars (if you live in suburbia), health insurance, supermarkets, and we need internet service to communicate with the rest of the world. In the 1930's most people lived in cities, where their transportation needs were provided for, or in rural areas, where people were largely self-sufficient or could rely on their community. Most people didn't even have their own telephones let alone all the other consumer goods we take for granted today. In short, we've largely lost the ability to take care of ourselves. It would be helpful to try to restore some of that knowledge/independence just in case! Excellent video as always, Austin.

[richardackley]

Austin really good video. Now I’m scared because I’m not being frugal enough. I need to cut expenses even more now and I’m not sure how far I can go. Your videos help a lot, and I’d better adapt faster before the next collapse…which is coming soon. Thank you.

[SteveHartman-myrg]

Save during good times to get thru hard times

[EmKayB]

Conspicuous consumption is rampant, everyone's buying cars and investing in unregulated things. Sounds like pre-depression 20's. There's a great PBS documentary about the Great Depression on YouTube from the 90's. Highly recommend

[paddymurphy-oconnor]

An interesting related event is the Limerick Boycott. Dueish merchants who had recently moved to Ireland began to offer household goods to Irish housewives on credit. It seemed too good to be true, and so it was, as the housewives became ensnared in debt. Seeing their plight, a local priest preached from the pulpit and essentially told the women to recognise their dignity and avoid this enslavement and he encouraged the townspeople to boycott these unscrupulous merchants. Thus they were driven out of the town and the simple people once again lived in peace.