Today's fast-spending youth could learn from Depresssion-era savers

Remember the phrase 'money doesn't grow on trees?' It still doesn't.

from the October 24, 2007 edition

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Those of us whose parents and grandparents had firsthand memories of the Depression realized, in listening to their experiences and observing their quiet example, that they knew the value of a dollar. Even decades later, when they no longer needed to scrimp and could easily splurge, many continued to be careful with money. It wasn't a question of being unnecessarily frugal, tight, or miserly. They were simply being prudent. Waste not, want not.

They taught us to turn off lights and water. They paid with cash whenever possible. They stashed carefully saved coins and dollars in the proverbial sugar bowl. And they joined the Christmas club at the bank, diligently setting aside money for the holidays. Go into debt for Christmas? Unthinkable.

These were generations that knew how to distinguish between a want and a need. A youthful request for something frivolous, unnecessary, or unaffordable might elicit a lighthearted response from a parent or grandparent: "Money doesn't grow on trees, you know." End of discussion. Pestering had less power then.

These were also generations that ceremoniously escorted even young children and grandchildren to the bank on a Saturday morning to open a savings account. They helped to give us a sense of achievement as tellers recorded each modest deposit in our passbooks.

Some of those habits and attitudes, born of necessity, remain useful in prosperous times, with or without the threat of an economic downturn.

Already there are modest signs that profligate attitudes might be changing.

As one small step, some parents are promoting efforts to scale back over-the-top birthday parties for children.

Here and there, financial experts are also promoting financial literacy classes. Jump $tart Coalition for Personal Financial Literacy, committed to the financial education of students, finds that many high school graduates can't balance a checkbook. Most also lack basic skills in managing finances involved with earning, spending, and saving.

Given Americans' abysmal savings rate, that education can't begin too soon.

Perhaps the biggest generation gap is the one that exists between Depression-era savers and all the big-spender generations that have followed them. In an age of excess consumption, these older savers could offer useful perspectives. Call their class "Lessons from a Sugar Bowl," and offer it to anyone who wants to spend less and save more.

Quick – seats are going fast.

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