Budgeting Strategies Learned From the Great Depression

You can help the budget by buying pre-owned goods.

You can help the budget by buying pre-owned goods.

During the Great Depression, unemployment reached 25 percent in the United States, and bank failures wiped out many people's savings. With jobs scarce and the rainy day fund gone, people learned to do more with less. The difficult times lasted more than a decade, making smart budgeting second nature to Americans of that generation. Even today, we can live better by learning their successful budgeting strategies.

Pay Cash

During the 1930s, Americans didn't have wallets full of plastic to make every wish an instant reality. Like them, you can pay cash, avoid debt and stay current with your expenses. Whenever you must pay by check or credit cards, limit the total to the balance in your checking account. Then pay off your charges completely every month to stay out of the red.

Budget with Envelopes

Grandma or Greatgrandma didn't have computer spreadsheets to keep track of expenses during the Depression. You can still use their old-fashioned envelope method for the cash portion of your budget, as Dave Ramsey suggests. First, plan how much you should spend each month for each category, such as food, clothing and transportation. Put the amount you allocated in the corresponding envelope every month, and take money out only for that purpose. This method works only if you stop spending for each category when its envelope is empty.


During the Great Depression, Americans saved precious budget money by growing their own food, sewing their own clothes and doing their own repairs. For many families, a home garden was a necessity to fill empty bellies. People cooked from scratch, canned home-grown produce and raised their own chickens. After making their clothes, they sewed quilts from the scraps and from worn-out clothing. If you don't have the skills you need to do these things yourself, learn from library books, the Internet, extension services or classes.

Try Alternative Acquisition

With jobs scarce and paychecks reduced, Americans learned to get things cheap or free during the 1930s. Today you can save by buying many things used instead of new, including clothing, automobiles, toys and household items. Dispense with money entirely by trading and bartering your goods and services, as the people who survived the Depression did. For example, trade your carpentry skills for fresh produce from a neighbor's garden. As local laws allow, pick free edibles that grow wild in your area, such as berries or nuts.

Make Do

During the Depression, people became expert at making do and repurposing items they already owned. Although you may not want to make clothing out of feed bags, you can cut down pants into shorts, make children's clothes out of adults' clothing and reuse bottles and containers instead of buying new ones. Recycle plastic bags into trash bags, and use old T-shirts and socks for rags. Refinish furniture, and find new uses for household items. If you need ideas, scour the library for books on recycling and making useful items from discards.

Use What You Have

Depression-era Americans learned the difference between wants and needs. If it didn't exist in 1930 or 1940, consider living without it. If you already own something, use it instead of buying a new and improved version. For example, wear the clothes you already have, drive the car you already own and keep your 2-year-old cellphone. If it works, use it; if it can be repaired, fix it. Watch the movies you already have and listen to the music you've already paid for.


About the Author

Karen Farnen has been writing online since 2009. She has taught piano and English as a second language. Farnen has a Bachelor of Arts in French with a music minor from the University of Pittsburgh and a Master of Science in education and a Master of Arts in French from California State University-Fullerton.

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