Scared & Scarred: Might Be a Good Thing

Scanning the Business Section of my local paper today, I came across a syndicated column by financial writer, Gail MarksJarvis of the Chicago Tribune.  She had me at the first paragraph:

“After living through one of the most brutal recessions in U.S. history, many late teens and young adults could be scarred for life, adopting behaviors that could skew everything from their own careers to politics, corporate profits and the stock market.”

She goes on to say that this recession may have the same kind of effect on our young Americans today that the Great Depression had on the youth of the 1930’s, which resulted in them being conservative spenders and investors, and being loyal employees less likely to jump from job to job in exchange for the security of a steady job.

Perhaps a few scars are a good thing.  A little pain can bring about growth, or at least teach one some lessons in pain avoidance.

The youngsters of the 1930’s set the tone of the prosperity of the 1950’s.  The economy grew slowly, but steadily.  There were no huge bubbles, but also no big crashes.   People only bought what they could afford to buy.  Defaulting on a loan or credit card was rare, because credit was usually only extended to people likely to pay it back.  There was not the sense of entitlement in people that we see now; people took pride in earning what they owned.

Of course, since most things in life are cyclical, these thrifty parents raised a bunch of baby boomers that were used to having material comfort and security.  They grew to expect it.  They got themselves into debt, learned how to play the bankruptcy game, and expected the government or others to bail them out when they ran into hard times…even when they caused those hard times through their own recklessness.

I sometimes think I’m a reincarnated soul from the 1930’s.  I don’t share the cavalier attitude about money and things that a lot of people my age exhibit.  I’ve always felt better putting money in the bank than I did spending it.  We use credit cards for the convenience and perks, but always pay the balance in full each month to avoid finance charges.  (The exception was when we first got married and we paid what we could each month for the Montgomery Ward washer and dryer that kept us from having to go to a dreaded laundromat!).  We’ve only bought homes that would give us a mortgage payment we could comfortably pay with one income.  I look for sales and clip coupons, driving my kids nuts every time they go out to eat because I’ll make them wait while I dig up a coupon for them to use.  Bad things can still happen, but the fall will be much less spectacular.

Folks are finally learning that the peace of mind they have from living within their means is more valuable than all the trinkets they had while living from paycheck to paycheck.  A few scars may help avoid a lifetime of stress and pain.

8 Responses to “Scared & Scarred: Might Be a Good Thing”

  1. 1 Cyndi December 29, 2009 at 6:24 am

    Excellent point. I hadn’t even thought of it but it’s so true. My kids are 9 & 11 and know more about living within your means and just about a bad economy in general than I did in my 20’s.

    The only problem is job security and sticking with the same job for 30+ years like our parents did. The corporate culture no longer rewards such loyalty. I’ve had at least 2 jobs that I would have been more than happy to stay at until retirement but they were both closed down…one was well before the economy tanked. Maybe it’s just my industry or maybe I’m just cynical but I don’t think any corporation values long-term employees. We’re all just numbers.

  2. 2 evenshine December 29, 2009 at 10:55 am

    Absolutely. If the recession gives kids (and young adults, and even adults) some scars to be learned from, I think it can only do us good in the long run. Nicely put.

  3. 3 robinaltman December 29, 2009 at 11:14 am

    My kids aren’t scarred enough.

  4. 4 Dawn December 29, 2009 at 11:21 am

    Scars are beautiful things. What’s important in life, the things that money can’t by. I truly believe my previous life was spent as a pioneer living on the land 🙂

    I share the means and ways of how we live on a budget with my kids, we prioritize our needs, we shop, compare and read labels together. Books offer little compared to the experience of living wise and within your means.

    Your post reminds me of my dear Grandmother who raised children as a single mother during the depression. Oh how I loved her stories of the “old days.” Precious you are for posting this today Les.

  5. 6 Consuella Banana Hammock December 30, 2009 at 10:14 am

    les you are always so practical! you mean we shouldn’t bring up our kids to believe that they can have any little thing their hearts desire?

    your post reminded me of a talk i had with my family over dinner. my step mom was discussing how slow her energy efficient dryer was, much complaining and bitching about it. (this is her dryer at her mountain home that came with the home when they bought it) i told her how in france practically no one uses dryers because they take up too much energy and electricity is expensive. you should have seen the entire table turn my way, like a cavewoman was suddenly in their midst. they were stunned that i actually hung my clothes to dry. my sister said, “i will pay anything to have my convenience.” and thus the american attitude toward life…

    obviously my kids are too young to learn from this particular recession but christmas always makes me ask some big questions. what am i teaching my kids by flooding them with gifts? what can i do to teach them to live within their means? how do i teach them to not be wasteful? how do i teach them that convenience isn’t the highest value?

  6. 7 lynette December 30, 2009 at 4:26 pm

    what a great perspective, les. i wholeheartedly agree with you in principle. having grown up abroad, surrounded by cultures less materially-enriched and less materialistic, i am pretty financially conservative, and have tried to teach this to my kids.

    i worry about money. eight years of grad school making peanuts does that to you.

    over the past year, we focused on getting rid of all car debt and credit card debt.

    and then what do i do? i let my sentimentality about this maybe being the last xmas together kick in, and i am now pouring over the credit card statements in dismay…

    another lesson learned…

  7. 8 Chris January 6, 2010 at 3:59 pm

    If “scarred” means not being an utter moron, then scar me up, recession.

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December 2009

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