Since late 2007, too many of us have felt the pangs of unease in our personal and economic growth potential. We can choose to make decisions based on the news, economic reports and /or our own observations. Trading Economics reported that “Real gross domestic product in the United States increased at an annual rate of 1.9 percent in the first quarter of 2011 ” (with a 9.1 percent jobless rate). Compare that to a 22.5 percent increase in Singapore (jobless rate of 1.9 percent), China at 9.7 percent GDP growth ( jobless rate 4.1 percent), and India – GDP increase of 7.8 percent (jobless rate of 9.4 percent).
Although recession is defined by most economists as two or more quarters of declining real GDP, some also like to define it as a 1.5 percent rise in unemployment within 12 months. Regardless, a layman’s definition of recession is more or less about people in general doing less well than they were some time ago – be it six months, a year or more ago.
There is a lot of speculation about our current state of economy and the views provide a full spectrum of where we are today in terms of our economic and global future. The news is abuzz with personal finance, money management, tips on being frugal, emergency fund advice and anything to do with salvaging or repairing financial situations. But rather than being overwhelmed with too much information, perhaps some valuable lessons remain in our own family history. After all, our grandparents had little or no access to credit and money management tools like we have. Here are some ideas to adopt if you haven’t already:
1. Thrifty = careful spender
Most of us would agree that our grandparents were careful spenders and frugality was considered wise regardless of how their economic situation improved over time. Being careful is a virtue and it does not equate to being cheap!
2. Make do with less
In my grandparents’ time, you didn’t see accumulation or hoarding. Society wasn’t consumer oriented. And if something broke or wasn’t quite right, it was repaired or altered. Wastage was taken seriously.
3. Debt Is a Really Bad Word
Even a generation ago, people avoided debt. If you didn’t have the money to buy what you wanted to, going into debt was not an option. It still remains the essential secret of personal finance well-being.
4. Homemade Is Still The Best
Nostalgia about the food at our parents or grandparents is commonplace. Not only is it less expensive, the quality of homemade meals trumps eating out hands down. Also it explains why most of us have such good feelings about grandmother’s cooking. Eating out was reserved for special occasions in that generation whereas today it is a fact of life in most households. The tradeoff is the cost to our bank accounts and overall health.
All in all, simplification is sometimes all we need to make a change for the better in how we approach our life. Were our grandparents relatively unsophisticated? Indeed. Yet with all the tools and technology we have available today, many people feel more uneasy about their financial stability than our grandparents did at a similar age. But we can change that by going back to some basics and changing some habits and denying ourselves smaller pleasures to make way for a better future.
Ritu Mehta, Editor ACE Cash Express
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