My partner and I wrapped up our college years during the booming ’90s, soaking up some rather misguided ideas about money: that jobs would always be around and that buying a home was always a smart choice. Fast forward a bit—I had my first child during the Great Recession and another as the economy crawled back to life. We didn’t lose our house, but I faced unemployment and our savings vanished quicker than you can say “housing bubble.” Navigating parenthood amid financial uncertainty and witnessing others lose jobs and homes was terrifying. This experience made me more cautious with money, akin to someone who lived through a major economic downturn. Here are the eight crucial lessons I want to impart to my boys.
- You Don’t Need It. Whatever you think you absolutely must have, just hold off for a month before buying it. Every time I felt the urge to splurge on a new sofa, outfit, or gadget, waiting a month usually made the desire fade away. It turns out, wanting things is just part of being human, and I’m learning to accept that feeling without acting on it.
- Not Every Loan is a Good Idea. If a bank offers you a loan for your dream home but you’re left with just a few bucks after doing the math on your income, trust your instincts over theirs. Just because money is on the table doesn’t mean you have to take it.
- Consider Layaway. Eyeing something pricey? Try saving a little each week in an envelope instead. This method not only builds anticipation but also helps you avoid impulse buys.
- Home is Where You Make It. You don’t need to own property to create a loving home. Many families thrive in rental spaces, so don’t get caught up in the idea that ownership equals happiness.
- Homes Aren’t Investments. The value of your home isn’t guaranteed to increase over time. It’s simply a place to live, not a quick path to riches or even a slow one.
- Invest in Experiences, Not Things. When you spend money, focus on experiences rather than material goods. Research shows that creating memories leads to lasting happiness, so book that road trip instead of buying the latest smartphone.
- Live Frugally, Especially While Young. Ideally, housing costs should consume about one-third of your income. However, in some areas, it can balloon to half. Many young people, facing tough job markets, have found success living with roommates or even moving back home—there’s nothing wrong with that!
- Adaptability is Key. Unlike previous generations, which often defined success through stable jobs, yours will be defined by flexibility. As job markets shift, it’s important to continually learn new skills and build connections across various fields.
I hope my kids won’t remember the recession firsthand and that by the time they’re entering the workforce, the economy will be thriving like it did in the ’90s—because a parent can dream, right?
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Summary:
In this article, Jenna Thompson shares eight essential money lessons learned from her experiences as a parent during the Great Recession. These lessons emphasize the importance of patience before purchases, the value of experiences over material possessions, and the need for adaptability in an ever-changing job market.