I have been thinking a lot lately about this "Great Recession" that we are living through and specifically what we will tell our grandchildren about this time in history. My grandmother and my mother lived through the Great Depression and when I was a child I asked what it was like. I can remember the majority of the stories that they told. Grandma's phrase "gather up the fragments and use them up" has come to my mind many times over the past year.
Here is my story that I will tell them. How in August of 2007 when we were on vacation the news was just breaking about the subprime mortgage market collapse which over time led to a stock market crash (2008), banks closing, widespread unemployment, foreclosures, families being kicked out of their homes and moving into tent cities and so on. I could name more. Ultimately due to a significant decline in income (due to the recession) the small law firm I worked at closed.
That is the basic story. The story within the story is as follows: the reading of the newspapers in August of 2007 and the uneasiness I felt which led to a major debt reduction plan. I had never been quite so motivated to tackle our debt especially after reading articles in the Wall Street Journal and hearing experts predict the possibility of what was next. By the fall of 2008 we had reduced our debt considerably, had some money in savings when I realized there was a great possibility if the economy didn't rebound soon, I would be out of a job. It would seem that the experts had been correct in many of their predictions.
We didn't put our heads in the sand but continued to get prepared by working on debt, not adding debt and putting money into savings. By the time I lost my job in July 2009, almost two years after the news broke about the subprime mortgage market collapse, we were in good shape financially speaking. Because we had prepared, I had choices. I could stay home or try to find another job. I chose to stay home. We had taken the steps necessary that we could live on one income if we had to or wanted to.
We did not throw up our hands and deny what was going on. We didn't go out and spend money wildly so that we would feel better by owning something new. We remembered the recession of the early 1980's and the stock market crash in 1987. Both times we were employed and didn't lose our jobs and really saw no change in our lifestyle. This time was different. This time we saw more widespread unemployment, more foreclosures and such. We could feel a sense of dread or fear. Fear is good if it motivates you to make a positive change in your life.
So the story I will leave with my grandchildren is that we should always be prepared for the possibility of a time of famine in our lives - yes just like Joseph in Egypt. We should all be prepared. Live below your means is a good thing. Ask yourself constantly when you are shopping "Can I afford this?" and then remind yourself "that you have everything you need."
When a crisis arises, don't panic, don't stick your head in the sand and say all is lost. Instead step back and take a good look. Trust in God and use the commonsense he gave you.