Becoming Economically Resilient During Tough Times


olditaly2.jpgTrent over at The Simply Dollar blog had an interesting post this morning on “A Long December”; that is, how, for many American’s December will be a tough month given job cuts, gift buying pressue, investment/401K performance, and the poor economy in general.

Trent’s post got me thinking about my childhood and how my parents (pic: that’s my mother on the left with my great grandmother and grandmother in Calabria in the late 1960’s) handled tough economic times.  And I easily concluded that parents didn’t panic much or for that matter pay much attention to recessions, the stock market, or even my dad’s job (my mother did not work a formal job).  I’m sure my folks worried like everyone else, but I don’t remember hearing or feeling any sense of panic from mom/dad.

I think part of my parent’s economic resilience centered on two key ideas:

1. Don’t depend solely on a job for income.  High net worth folks know this idea very well (not that my parents are high net worth types) and it’s really about having multiple income streams, including real estate, dividends, CDs, odd jobs, etc.  

2. Cash as a security blanket.  My parents take the six months of emergency living expense notion and turn it on it’s head.  That is to say, they probably have too much cash in reserves, but it lets them sleep well each night and behave with plenty of confidence in normal times and periods of recessions.

At the end of the day, being confident about tough times is about being prepared for tough times.


  1. I think reflecting on what our parents, grandparents and great grandparents did to live frugally is an excellent idea. Credit wasn’t an option and people did what they needed to in order to survive and feed their families. When my grandfather moved to Canada from Holland, he and his brother, who became farmers, shaved their heads so they would be too embarrassed to go into town where they would be tempted to spend their money!

  2. Thanks, Saver Queen (I like the shaving head tip!).
    Credit not being an option is an important point, it takes real discpline not to use your card (and to pay off the balance each month if you do use it).

  3. Shaving my head saves me $400 a year.

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