Yesterday, the Dow Jones Industrial Average concluded its worst week ever. Between October 3 and October 10, the index plummeted by 1,874 points and lost 18% of its value. The Dow currently stands at 8,451 points, down 40% from its all time high of 14,164 just a year ago this month. The last ten years of market growth have been wiped out, and some are already calling it a lost decade. The latest news is that the U.S. government is going to step in and begin a partial nationalization of the banking system, for the first time since the 1930s. Is this a new Great Depression?

Dow Jones Industrial Average: October 10, 1998 - October 10, 2008.

Depression wouldn't be a total catastrophe. I, for one, wouldn't mind finding more locally grown fresh fruit sold curbside at cut-rate prices. Thankfully, though, I don't think the situation will quite come to that. Yes, I see the chart. It's true, the final bit does have an eerie resemblance to the precipice one might expect ships to plummet from should they sail beyond the end of the world. But the world is round, and markets are cyclical. This sharp decline may or may not continue for a while, but before long bargain seekers will begin swooping up cheap stocks and start to bid up prices. Slowly but surely, the market will recover. Even the Great Depression had to end sometime.

In any event, the road to a recovery is likely to be rather drawn out. Indeed, many people who don't have investments in the stock market haven't even really felt the negative consequences of this month's economic crisis yet. However, unless there is a quick and drastic turnaround, it's inevitable that almost everyone will bear some burden of the loss. It might take the form a lost job or lower income. It might come as the inability to get a loan that would have otherwise been available. In any case, it's likely that money will be tight for a lot of people until the economy as a whole changes course.

However bad the immediate future may be, it is important to remember that a decline in income doesn't have to equal a decline in the quality of life. A little money can go a long way, when used properly. Most people, even if they find themselves unable to spend as much as they once could, will still be able to live as happily as they had before—if they try. After all, spending less doesn't have to mean sacrificing. In many cases it just means being more efficient, and not spending money redundantly. While some things like food and shelter are essential, many other items are little more than frivolities. Many people are just so used to having to pay money for things that they don't realize they can get equal or better experiences for free. A few immediate examples come to mind.

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