Financial lessons from the Greatest Generation

As I sit at my computer on the morning of Memorial Day 2012, I couldn’t help but to think about an article I read in Friday’s Cincinnati Enquirer. The article’s title was “Greatest Generations greatest gift”, and it talked about those of the Greatest Generation…the men and women of the World War 2 era. The article made the argument that their gift was not the winning of the second world war, but the fiscal discipline that they learned in the 1930’s and 40’s.

Many of this generation were from poor families, so they learned to make do with what they had. And during the war, those on the front line had to endure all manners of hardships, while those back at home lived through government rationing and long, hard hours at factories, shipyards, and munitions factories. These years of struggle created individuals who understood the importance of living below one’s means, and they would practice this belief for the rest of their life.

The article reminded me of my father. While he is a little younger that those who fought in World War 2, he lived through many of the same tough times. Born in 1933 to a lower middle class family in Cincinnati, he was a child through the Great Depression. There was always food on the table, but there was never anything extra, and nothing was wasted…something that my brother and I were constantly reminded of when we were wasteful teenagers. He got his first part time job in 1941…to help feed the family.

Through the war years, he continued working his part-time job. My Grandfather also made sure that my father and his friends collected recyclables as part of the war effort; it was their patriotic duty, he said. In between all of the work to be done, my Dad still managed to find time to get to school. He would later enter vocational training to become a machinist. He would graduate high school in 1952.

In 1955, he was drafted into the Army, where he spent the next few years as part of the Corp of Engineers building and maintaining our early missile defense systems. While serving his country, he lived as cheaply as possible, sending the bulk of his paycheck home to my grandparents to put in savings; his goal was to have enough money for a down payment on a house when he got out of the Army.

After his discharge, my father came home to the recession of the late 1950’s. Unemployment was high. My father also found that the two years of saving he had sent home were gone; my Grandparents had “lent” it to “family members in need”. Unemployment services would not assist him; they said he had not worked in over two years. Likewise, the VA refused him help, telling him he was not a veteran because he had been a soldier during peacetime. Dad did finally manage to find a job at a small machine shop…a place where he would work for the next forty years.

Dad returned to living as cheaply as possible so that he could save for his dream house. By 1960, he had purchased the home. Like many in his generation, it was not a big place, nor was it a new place. The home, built in 1926, had two bedrooms and only 1100 square feet of living space…less than half the average home size today. But it was more than enough for him, and had the benefit of an unfinished basement that would be used as a workshop. He worked hard to pay off the mortgage as fast as possible, and began to use his basement workshop to make extra money on the side. By the time he and my mother married in 1972, the house was paid for.

Through the 70’s and 80’s, my brother and I learned the same fiscal restraint that our parents had (Mom was a big saver too), although we were not always happy to learn. I can’t count the number of times I was chewed out at the dinner table for leaving food on my plate, and we did not always have the latest and greatest toys like my cousins. My brother and I routinely referred to Dad as “Cheapskate Charlie” when he would count the number of charcoal briquettes used for the barbeque, or when he would turn off the hot water heater overnight. We weren’t season pass holders at Kings Island like much of the rest of the family…we only went once a year, and then only when we had discount tickets for General Electric day.

However, unlike the rest of the extended family, I can never remember money problems as a child. I do remember other family members…aunts and uncles who often made far more than my parents…coming to Mom and Dad for a loan (which was rarely paid back). We did have times when money was tight, but when that happened, we worked extra hard at making each dollar stretch. We cut and split firewood to heat the home in the winter; in the summer and fall, most of our produce came from a large garden. The wild blackberries in our backyard were converted into jam and jelly, and the black walnut trees gave us all of the nuts we could ask for.

At age fourteen, I got my first part-time job. It was not optional; my parents gave me the choice of working for Mom’s catering business, or I could find another job…not working was not an option. While I sometimes hated going to work, I liked having my own spending money, and I quickly learned how easy it was to blow through your entire paycheck each week. Slowly, I began to adapt my parents’ fiscal responsibility.

Today, I am quickly approaching age forty, and I see that I have many of my father’s same habits…the same ones that I used to complain about as a kid. The kids get irritated when I complain about them wasting; my hot water heater is turned down as low as it will go, and I hand the laundry to dry on a line in the backyard. I still don’t have a season pass to Kings Island, and I don’t think I ever will. I bought a house that cost less than half of what the banks were willing to loan me, and my mortgage (which is my only debt) is always paid on time…with a little extra added to shorten the term.

Yes, the 1930’s and 1940’s did produce a “Greatest Generation”, and I am sure I am not the only person who has benefitted from their knowledge and experience. All of us who have learned from them owe a debt of gratitude to that generation, and it is our duty…our responsibility…to pass that knowledge on to the next generation.