Lessons from the 1940s – Save and Invest
The generation that fought World War II on the battlefield and on the Home Front had come through the Great Depression. While we cringe at today’s unemployment figures hovering around 10 percent (as we should), in 1932, 13 million were unemployed – 25 percent of the labor force at a time when most households had only one wage-earner.
This generation learned the importance of managing money wisely. During the war, that meant purchasing War Bonds. Many enrolled in automatic purchasing programs to buy a set quantity with each paycheck. Bond rallies and drives brought in many more purchases. By the end of the war, 85 million Americans had purchased $185.7 billion worth of bonds.
More than patriotism and the financial necessities of total war, War Bonds were a good investment. At the end of ten years, the bonds matured and were worth far more than their purchase price.
We can learn a lot from this generation about personal finances. Don’t buy more than you can afford. Live frugally. Reuse and repair and wear things out. Don’t go into debt. If you are in debt, get out quickly. Don’t put more on your credit cards than you can repay at the end of the month. Set aside a portion of your salary regularly for savings and investment.
For today’s Americans, these concepts seem impractical and foreign. But they work.
Which of these ideas are you trying now? Which would you like to try?
My parents, who were born in the late 1930’s and early 1940’s, are, I think the last generation to save for things. By the time that generation’s children came along (post 1960), we determined that we needed everything NOW. Things that our parents didn’t have until 15 or 20 years into their marriage, we had to have immediately. For instance, new furniture, a dishwasher, fancy vacations. My parents didn’t have any of those things for years, but, now, newly married couples deem ALL of those things essentials. We want everything…and we want it now…and what’s more, we think we can’t live without it. And so we’re in debt up to our eyeballs.
Have a lovely day,
Thanks, Patti! It’s so true. Past generations believed in delayed gratification – now it’s all about instant gratification. And everyone’s paying dearly for it. Yes, the banks shouldn’t have been so free with credit (and the government definitely should not have coerced them into doing so!), but the whole housing meltdown really boils down to the consumer saying, “I want it; therefore, I deserve it NOW!”