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.

To begin with, take driving. Although this is changing now, I still know many people who act as though the only way to go anywhere is to take a vehicle. Oil and gasoline prices have fallen this week, but fuel is still expensive, especially considering what an ephemeral thing it is. Once you buy it, you can only use it once. Why waste it in situations when you could get by without? I walk everywhere I go, unless I'm leaving town or hauling something heavy. Sometimes that means I walk a few miles, but that's not a hassle. Walking isn't just a substitute for driving; it's better than driving. It saves money, keeps you healthy, helps the environment, and gives you a chance to set your mind free to wander. Plus, if you walk with a friend, you'll find yourself able to have a quality conversation with no distractions like TV or music. True, walking takes longer than driving, but that extra time isn't wasted time. It's time invested in exercising your body and mind. What better thing would you have used that time for otherwise? If you're really in a hurry, use a bicycle. In any case, both walking and biking are not only cheaper than driving. They're great activities in and of themselves, and both are far more enjoyable than fighting traffic. Instead of looking at walking as something you're forced to do when you can't drive, think of it the other way around. Driving is an expensive hassle. Don't drive unless you're unable to walk.

Television is another budget-killer. Do you pay for cable or satellite TV? Really? Did you know that you can get the five or six most watched TV channels for free, out of thin air, by using a handy inexpensive gadget called an antenna? It's true! If you have an older TV, you may also need a digital converter box to get the signal from your antenna to work properly—but don't fret; you can have the government pay for it. Its true, there are probably some cable channels you'll miss, but today the overwhelming majority of cable TV shows are also available online in their entirety. If you already have an internet connection, then why pay for these shows on cable every month too? It just doesn't make sense to pay twice, especially when 1/3 of what you're paying for are advertisements trying to sell you more junk you don't need and can't afford.

Another monetary black hole everyone would do well to avoid is proprietary software. Computer software is often ridiculously expensive. Microsoft Windows and Mac OS X are both over $100. Add Microsoft Office 2007 and you've doubled the cost. Then there are the other things you might want: games, graphics tools, system utilities. It can be a costly habit, but it needn't be. The computer I'm using now is running almost entirely on free software. For the past few years, instead of Mac or Windows, I've been using Ubuntu, a fully functional operating system that includes office suites, graphics tools, games, and a boatload of other programs, all at no cost whatsoever. Why pay two or three hundred dollars to get basic software for your computer, when you can get a system of equal or better quality for nothing? Furthermore, Ubuntu and the many other variants of GNU/Linux are not only free of costs, but also largely free of restrictions. Once you get your hand on a distribution, you're at liberty to use it in any way you want, make any modifications you like, and even start distributing your own version to the world, should you so desire. British actor Stephen Fry recently made a video that explains the concept fairly well.

Software, TV, and gasoline are just three things that people could avoid paying for with little inconvenience. There are far too many other things in this category to list each of them here, so I won't go on and detail more unnecessary expenditures one by one. You're already well aware of what your money goes to buy. Instead, to end this post, I'd like to point out one thing everybody already owns that's more than able to replace a lot of the unneeded products on store shelves. It's called imagination.

It's amazing how much money people spend to placate desires that could be fulfilled with just a little imagination. Just think about all the gizmos and gadgets that people think they need. The way that people rush out to get the latest toys with the newest features makes it seem like having new stuff is an essential part of life. It's not. Inevitably, these new gadgets are met with the greatest excitement, used enthusiastically for about a month, and then discarded shortly later as they start to get boring. When that happens, the cycle starts anew as people search for another product to alleviate their boredom. This is this basic premise of consumerism, but it is an entirely unnecessary cycle of expenses.

The fact is, no one needs a new car, new clothes, or a new gadget to avert boredom and enjoy life. While it can help indirectly, buying new stuff is entirely extraneous to the problem of keeping life interesting. Life will remain lively and enjoyable for anyone who is able to continually think new thoughts and have new experiences, regardless of whether or not that involves buying new things. The real solution is imagination. I don't need to go shopping every week to keep life interesting, because I can exercise my imagination every week by writing about a new topic for this blog, or by going for a walk and looking for new sights to observe, or by thinking of something new to do with my friends. Using my imagination doesn't cost anything, and it ensures that my life is perennially exciting.

No one with the imagination to think up free alternatives ever need waste money on games, toys, and tools made by someone else. If we all used our imaginations more often, not only would we save money by not having to pay other people to think for us, but we would also keep ourselves from ever getting bored. Those who really take the time might even come up with ideas that can earn money, and that could be the solution to this economic crisis. All we need is a new generation of imaginative thinkers to usher in the next wave of innovative products, and new businesses, jobs and income will follow closely behind.

To sum up, cutting back on spending does not have to mean cutting back on the quality of life. It's just a matter of eliminating waste, and that's worth doing in good times as well as in bad. Regardless of how much money you have, it's silly to pay for products and services that can be replaced by better alternatives for free. Above all else, don't spend money when you'd be better served by just saving the cash and spending some time to think. That's a real investment, and no matter what times ahead are like, you'll always be able to reap the benefits of a creative mind in the future.