Planning For Financial Disaster

It did not matter who you were, towns did not want you moving in when they had no work for themselves in the Great Depression.

I was born 11 years after the end of the Great Depression ended. I was lucky to be born 6 years after the end of World War II. I grew up in the biggest economic boom that this country ever had. But all my youth the old people told me that the Great Depression is coming back and to prepare for it. As the old people died off, the younger people started dismantling the laws that stopped the problems of the great depression from starting up again. These laws such as “Glass Stiegel” mainly dealt with regulations of Banking, Brokerage, and Real Estate. They allowed all three of these industries to merge just like in the 1920s and it caused a 1930’s style Depression in the early Twenty-First Century. I spent the first 50 years preparing for the Great Depression that finally came. I was out of work for 2 years and did not make good money again for 5 years. I did not have a job that I wanted or a job that was stable for 8 years. I am still not to the salary that I had in 1998.

For most people this would cause a lot of stress in many people’s lives but not as much as the people who could not pay their bills or no longer had a roof over their head.

Segregation in the Great Depression

According to the American Psychological Association, as aftershocks of the Great Recession (first Great Depression of the 21st Century) continue to be felt, money is the most often named source of stress for Americans. In fact, in 2010, more than 75% of Americans named money as a significant cause of stress. At the same time, an American Psychological Association survey in August 2010 found that 73 percent of parents report family responsibilities as a significant source of stress. Combine stress from money worries with stress from family concerns and you have a serious situation. Not only can this kind of prolonged stress be emotionally draining and harmful to your family relationships, it can literally make you sick.

They say that one way to manage the stress is by taking steps to save money. When unexpected money problems arise, some simple cost-cutting measures can free up money for the essentials. Shifts in your standard of living can be uncomfortable; however, it’s important to view each of your expenses objectively and be realistic about what you can afford. What you need to remember is to keep a level head, act immediately and plan your finances accordingly. Hesitating or putting your budget planning aside could make things worse. You owe it to yourself and your family to remain confident and in control.

Unemployed and homeless Blacks in the Great Depression

Let’s look at the big cuts.

Home Mortgage — If you feel your ability to keep your home is at risk, immediately contact your mortgage holder or a certified HUD counselor to discuss your financial situation. You may qualify for a deferral, a loan modification, or alternative payment plans.

The Car — Can your family become a one-car family? Letting go of one of your vehicles could create significant cost savings (payments, gas, insurance, maintenance, etc.).

Recreation — You can still enjoy life without all the perks. Luxuries like dining out and weekend getaways can be replaced by home cooking, backyard parties, and exploring local parks, museums, and attractions.

You can also do little things that add up to big things.

Cash Only — Fair warning; it will be difficult, but try to pay for everything in cash or with a debit card. Using your credit cards unwisely during financial difficulties only digs you deeper in the hole.

Credit Surfing — Evaluate all of your credit card balances and interest rates. Find the cards with the lowest rates and transfer your balances. Weigh the cost of the transfer fee – will it be greater than the interest you save? – And be aware of the impact on your credit score of closing accounts vs. keeping them open. Finally, focus on not running your credit card balances back up.

Negotiating Lower Rates — I negotiate my credit card interest rates. Contact each of your credit card companies and ask if your interest rate can be lowered based on past payment history. If not, ask if there are alternative payment plans available based on financial hardship.

One thing that’s certain is that household costs are on the rise. Just take a look at what you’re spending on food and gasoline today compared to two years ago.

Adjust Your Minutes — The first thing I looked at was my phone bills. Evaluate your mobile phone plan as well as your land line bill in detail. Call your provider to ask if there is a less expensive plan. I went from a national brand cell phone service to a phone plan from Wal-mart and saved $75.00 per month without loosing any services that I needed. Also, consider if you can live without either your cell phone or your land line.

Cut the Cable — Reduce your monthly cable/satellite bill by eliminating premium cable. By leaving my cable provider and going with a package deal (Cable, phone, and Internet) from another, I saved about $25 per month.

Clip Coupons — Using coupons at the supermarket is a smart and easy way to save money. Just be sure that the final price (using the coupon) is less than the generic or store-brand alternatives. I buy generic brands first before I look at name brand items.

Buy in Bulk — Consider shifting your focus to the future when purchasing household items. Lower-priced, higher volume choices make sense for products that you need now and will need in the future such as toilet paper, paper towels, cleaning supplies, computer paper, and etc. If you are buying for a big family then the same goes for select food items, especially those that keep well or can be frozen. If you can buy items in a co-op with other family members or friends with an agreement to purchase giving a percentage of goods to an individual or family, you will be able to get considerable savings.

Thrift Shopping — Consider a trip to your local thrift store before you head off to the mall. Many second-hand clothing and household items are in good condition and cost substantially less than those in typical retail stores.

Save Gas, Drive Less — Keep in mind that every time you drive your car, it costs you money. If buying a new car, look at gas mileage first. Don't buy a car that you think will make you popular just to find out that it takes $60 every three days in gas to run. Consider car pools, ride shares, etc. Walk or bike to local destinations. It will save in fuel costs and save the environment too!

Newspapers and Magazines – Why purchase newspapers and magazines when you can read the same thing off the Internet? Use the Internet as much as you can for news and information in relation to buying extra media. Use the media to find shopping coupons for the store that you use. Go to the store website and see if they offer what you are looking for in coupons.

Stock market peaked in July 1929 then crashed to its low in July 1932.

It did not recover until 1954.

The American Psychological Association says; during tough times make sure to take care of your emotional and physical health, as well as your fiscal health. Recognize that not dealing with stress effectively could lead to unhealthy activities such as smoking, drinking, gambling or eating disorders. Your unhealthy activities may lead you to spend time in jail or in a hospital. It may kill you. Be aware of this and seek help if you think you’re seeing the signs of a problem.

Coping with financial hardship isn’t always easy. That is why you must prepare for the bad time before they come. They do not ring a bell on Wall Street when bad times hit. You don't see it in your local newspaper or on National TV. You usually feel the stress months or years before they start talking about it in the media.