That was definitely true in mine. My parents were children of the Depression and how my mother cooked our meals reflected the lessons she learned growing up in a kitchen where one used what you had available to feed the family. No supermarkets with their aisle upon aisle of various brands from items near and far came to her town or cities yet.
I was taught that a penny was just as valuable as a dollar because I was to save all my money not spend it. Needs were much more important than wants. I remember buying a record (CD equivalent) in my teenage years for the first and only time, and getting the discussion about how usually I was a level headed girl when it came to finances, so why would I buy such a luxury item like that?
Generally I am glad I grew up with this training. It not only came from my parents, but from my grandparents and their siblings. The stories they told about themselves, other relatives, and their friends painted a colorful visual of what it was like when the banks fell and how they lived during those trying years. Those times lasted even longer as they supported the WWII effort and the rationing that went along with it.
I have tried to live my life remembering what these generations have taught me. This posting is about one of those lessons. Let me bring it up to current times. Remember the financial crash of 2008? I can't recall all the institutions that collapsed beginning in August of that year, but some were Merrill Lynch, Lehman Brothers, Wachovia , Countrywide, AIG, and Bear Stearns.
They set off a domino effect that lasted for a long time and hit banks throughout our nation. This post is not to discuss the whys, but to prepare us for the next go round of the banking shut down. We have seen financial instability in other nations and with our federal government, the largest employer in the United States $16 trillion dollars in debt, we can expect changes.
Economists aren't predicting a happy new year even in the best of ideas. See: http://www.cnbc.com/id/49898014/Morgan_Stanley_s_Doom_Scenario_Major_Recession_in_2013
So after writing this blog, here is the bottom line for small business: look at where you have your banking accounts. When was the last time you compared and got price quotes just like you do anything else for your company? Some things to consider:
1. The generations' stories I heard discussed types of banks. Consider community v. national.
2. Remember how people used to have cash or gold on hand, even stories about "burying it in the backyard"? Consider a modern day version of keeping cash on hand.
3. Here is another reason for cash: remember Hurricane Sandy or another devastating disaster.
Electricity goes out, ATMs go down, banks and other establishments are gone/closed. Protect your investments, be ready to open as soon as you can, etc.
4. Interview your own older generations. What do they remember about the Depression? What lessons would they pass down? What do you remember about the Recession? What have you changed or want to change while you still have time financially?
5. Finances are different than budgets. You may be good at paying the bills, but may need help with the other part. Have someone give you advice, hire a CPA, etc. to get you started. You may not need them constantly depending upon how big your business is right now. But see that you aren't too far down the road before you have to make adjustments and regret not getting advice sooner.
We can wait until we have another October 29, 1929, August, 2008, or......we can prepare. Either way, it's coming.
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