Financial Lessons We Can Learn from Our Grandparents

learning from grandparentsYour grandparents (or maybe great-grandparents) were better than you at saving money. If you think long and hard about that, most of you will probably agree with that statement. There are a number of reasons why they were better and some things we can learn from those facts. Let’s dive right into those reasons.

Awareness of Economic Downturns

Let’s start with one of the main reasons — The Great Depression. If our grandparents didn’t live through it, they certainly were made aware of it by their parents. Living through or near times of disastrous financial times, they were keenly cognizant of the potential for hard times. Knowing that any minute the income stream could be reduced to a trickle, they had to stockpile money simply to survive. Also, because they probably had less money than us, they were more susceptible to financial downturns, which further incentivized them to save.

No Credit Cards

The availability of credit wasn’t what it is today, when almost anyone with a social security number is extended tens of thousands of dollars of credit — sometimes without even asking. In the first half of the 20th century people actually had to go to the trouble of asking and applying for credit. That money was really needed for living and/or investment expenses and not just as a convenience factor. The mere existence of credit cards has turned this nation upside down in terms of spending more than we make.


The marketing ingenuity of today is at an all-time high. Skilled marketing experts can deftly identify and target the population to which they want to sell and make their product seem indispensable. Print, radio, television, and digital media advertisers subtly lure us into thinking that the product at hand will make us prettier, stronger, healthier, more popular, happier, and so on. That may or may not be true, but they do a bang-up job of convincing us that it is. A marketer’s job is to get us to spend our money — not save it.

No convenient entertainment

When you think of what your grandparents might have done for entertainment, what comes to mind? You probably picture them sitting on the front porch talking to friends and neighbors, or listening to the radio, or maybe playing checkers outside the barber shop. That’s quite a bit different from our entertainment options of today: video games, rental and pay per view movies, satellite TV and radio subscriptions, gym memberships, computers, iPods, recreational vehicles, and the list goes on and on. They probably spent very little money on entertainment, where we may regularly and easily pay hundreds of dollars per month.

Lived Harder

Our grandparents were able to enjoy life without the ease of switches and buttons that quickly give us what we want. How much more money would you have per month if you didn’t pay for cell phones, the Internet, electricity for air conditioning, microwaves, computers, multiple televisions, coffee makers, etc? The “regular” utility expenses to cover all the household conveniences we enjoy are pretty substantial. Without even figuring in the costs of the appliances and gadgets, the energy cost alone is fairly sizable.

Harder to spend money?

Although this one combines element of the previously mentioned factors, it was simply more difficult to spend money 60 or 70 years ago. My grandmother couldn’t simply go online, purchase a new dress, and for a few extra dollars have it rush delivered right to the door. My grandpa didn’t have the “opportunity” to bid on that slightly-used pocket knife on eBay. There were no malls and shopping outlets within a few minutes drive of everyone’s house. A “trip to town” was a big event and required a lot of preparation. Once in town, there may have only been 2 or 3 stores at which one could spend their money. Now, if I wanted to, I could sit on my back deck with a wireless Internet connection on my laptop, visit any of thousands of online merchants, and with my credit card spend thousands upon thousands of dollars in a matter of minutes.

The Moral of this Article (i.e., Grandfatherly Advice)

I can only imagine what savings advice my grandparents might give me now if they were still alive. However I suppose it might go something like below:

  • Be careful about the money you spend today, because you might need it tomorrow. No one ever knows when a job will be lost, the economic markets are collapse, or circumstances change requiring one to dip into savings.
  • Don’t go asking for or accepting credit unless it’s absolutely necessary. Except in extreme circumstances, a man should be able to live comfortably on the wages he earns without borrowing from someone else. (P.S. I’m sure my grandparents never heard about credit scores and how a little credit here and there can help you in the long run.)
  • Don’t be tricked into thinking that you “need” something in order to be happy, popular, prettier, etc. Remember those advertisements are there to make you spend money. No, not everyone deserves to drive a luxury sedan or sports car. No, that new mascara is not going to magically transform you into a goddess of beauty.
  • Does spending money on things really make you that much happier? How many gadgets does one need to be content? Do you really need to be entertained at any and all hours of the day? Try slowing down a little and living a simple life. Read a book from the library. Invite a friend over just to sit and talk. Take a walk without an iPod and iPhone.
  • Toughen up a little. Do without some conveniences and don’t carelessly use electricity. Although it is somewhat of an “invisible” expense, energy does come at a cost and something that we can control. The more electronic devices that we leave powered on, the higher our energy bill. Also, you won’t spontaneously combust if the temperature in your house is 78 degrees in July.
  • Think twice before you spend money online. If you had to hitch the horse and wagons and take a bumpy 3-hour ride to town, would you buy that floor lamp that you just purchased at potterybarn? Before you click the “Checkout” button ask yourself if you really need that new putter or are you buying it just because you think it will make your scores better? Ease of buying might tempt us into buying something even though the need doesn’t exist.

Spending money is easy, especially when you don’t think about it. Our grandparents and great-grandparents may have been better at saving money than us, but that’s no excuse for us not to save. With a little forethought and personal financial awareness, we can all become better at saving our hard-earned money.


  • Beware of the marketer. They can make you think you need and/or deserve their product, when in reality you don’t.
  • Be wary of the ease of purchasing online. Before hitting the “checkout” button, ask yourself if you would purchase this if you had to go to the store and get it.
  • Never, never, never take for granted the financial stability and success that this country enjoys. Most of us (including me) have enjoyed a life free from much serious worry about our country’s economic stability. Current times of war, petroleum crisis, and escalating healthcare costs should make us more cognizant of the fact that our country’s financial dominance could easily begin to collapse.

Image courtesy of neovain

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6 Responses to Financial Lessons We Can Learn from Our Grandparents

  1. jake says:

    What some call “The Greatest Generation,” I call “The Most Spoiled Generation.” Yes, the technology wasn’t what we have today, but for what was around at the time, the people were very spoiled by the government. The government did everything possible to increase consumption and look at the result – continuation of that policy to today. One of the only ones to stand up and try and get america off of that course was President Carter and he’s looked at as a villain. The spoiled mentality of those people has been passed on until it’s what we have now – a culture built on how famous you are and how much wealth you have. Our economy can’t withstand it, thus the HUGE bailouts. If everyone starts to dramatically reduce consumption, we can remedy some of this.

  2. John — You have delivered a good, common-sense article that is well worth reading. I agree that we can learn a lot about saving from the generations that came of age 50 or more years ago. My wife and I have long discussed with both horror and fascination the spending habits of our peers who, until recently, acted as though the gravy train would never end.

    I cannot agree with Jake’s comment that the Greatest Generation was in any way to blame for our current economic crisis. The “Greatest Generation” (i) survived the depression without a lot of comfort, (ii) fought and largely determined the outcome of the War that decided the fate of the 20th century, and (iii) laid the groundwork for the civil rights movement. That generation was not the cause of the mass consumerism of the last 30 years. Indeed, I would blame the need for ever increasing corporate profits far more than I would blame any generation of consumers, except to the extent that consumers over the past 3 decades have increasingly been lambs willingly being lead to the slaughterhouse of debt. I agree with John that marketing, and the psychology of marketing, has gotten the better of us!

  3. Something else to remember is that for many years in many cities in America, “Sunday blue laws” required limited hours or closings of certain stores on Sunday.

    I remember seeing this first-hand when I was a child, although there are still a few businesses that observe such customs as a matter of corporate policy.

    Reason to close on Sunday: give employees a day off to spend with their families and / or attend church.

    Reason to open on Sunday: working people had more opportunity to do shopping errands.

  4. Jay Corn says:

    Yes we need to adopt frugal spending habits to start saving. Instead of spending money at the mall I have started doing something as simple as watching bargain hunting websites for the same stuff at cut rate pricing.

  5. Carol says:

    I sort of agree with the comments of “jake”. I think our grandparents were not more inherently frugal, I think they were forced to be savers because of the lack of access to cheap credit. If they had the same type of credit access that we have had over the past 30 years, they would have been in the same boat we are in now.

    There is an article in the NY Times that had a time chart of the savings rates of Americans over the past 100 years ( wish I knew how to do the link thingy!). I was surprised to see that Americans have never been big savers. The highest rates of savings was during WWII, but that was partly due to the lack of consumer goods being produced at the time and also rationing during the war. As soon as the war ended and companies were free to manufacture what they wanted, saving rates plummeted.

    My grandmother was an adult during the depression years and admitted that she learned the hard way about wise savings. We found $3,000 in a pillowcase after she died, plus thousands in the bank. My mom, who was a child and teen during the depression years, never met a credit card she didn’t love.

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