They Made It Through 15% Inflation. Here's What They Learned.

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WSJ Your Money Briefing 12 min 3 speakers 3 chapters transcribed 2 months ago
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Unknown 0:00
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J.R. Whalen 0:35
Here's your Money Briefing for Wednesday, March 2nd. I'm J.R. Whelan for The Wall Street Journal. Inflation is running at 7.5%, but imagine if it swelled to 10 or even 15%. Well, there are plenty of people who remember when that was actually the case and what they did to keep their personal finances intact.
Linda Gadkowski 0:53
If we went anywhere, which was usually very short trips someplace, we always stayed at Red Roof Inns. They didn't know anything else but Motel 6 and Red Roof Inns. And in the early 80s, they all wanted Cabbage Patch dolls. And those dolls were running up to $150 each. So I got a kit and I started making them for them.
J.R. Whalen 1:14
And they actually loved it. On today's show, we'll talk with two people who lived through double-digit inflation in the early 1980s and find out how they apply lessons from that era to today. That's after the break.
Unknown 1:26
This podcast is brought to you by ReliaQuest. Cyber criminals are constantly attacking. They want your data. They want your identity. They want your innovation. ReliaQuest fortifies your business with agentic defense, AI that detects, contains, and eliminates cyber threats in minutes. It helps your security team move faster at the work that matters most to protect the business now and delivers insights to help them predict what's next. ReliaQuest, agentic defense for the enterprise. Learn more at ReliaQuest.com. That's R-E-L-I-A-Q-U-E-S-T.com.
J.R. Whalen 2:03
A lot has changed since 40 years ago, but one thing that hasn't?

How did the host introduce the topic of 1980s double‑digit inflation versus today’s rates?

J.R. Whalen 2:06
Inflation. Except that today's 7.5% inflation pales in comparison to the early 1980s when it was running at nearly 15%. So how did people deal with runaway prices back then? And what lessons can we learn from them this time around? Today we'll be hearing from two people whose families found ways to make ends meet. First up, 77-year-old Linda Gadkowski lives in Florida now, but in the early 80s she lived with her husband and three daughters in Massachusetts. Linda, thank you so much for being with us. Thank you. So, Linda, tell us about your personal finances back in the early 80s.
Linda Gadkowski 2:38
Well, my husband was a young, struggling doctor, and I was a schoolteacher. I was the homebound tutor for the town of Barnstable, Massachusetts, and we had to put ourselves through medical school, and I had to put myself through college, so we knew all about struggling. And this hit us quite hard. Because finally we were making money and finally here was this terrible inflation actually taking away what I felt everything we had worked for so far.
J.R. Whalen 3:08
Now you had a busy household raising three children. So how did double digit inflation affect how you and your husband provided for your family?
Linda Gadkowski 3:15
Well, you ask my children today where they ever went. If we went anywhere, which was usually very short trips someplace, we always stayed at Red Roof Inns. They didn't know anything else but Motel 6 and Red Roof Inns. And in the early 80s, they all wanted Cabbage Patch Dolls. And those dolls were running up to $150 each. So I got a kit and I started making them for them. And they actually loved it. They loved the whole idea of painting the faces. And then I would take them to thrift stores because the dolls fit the three-month infant size clothing. So they could go to the thrift store and select those clothes for the dolls. And that seemed to make them happy considering the fact that they weren't really getting them.
Linda Gadkowski 4:02
And the word spread that I was making these dolls and a business ensued. So I started making them regularly. And so we were going to the thrift stores and when we sold a doll, I shared the money with the children so that they suddenly had a little bit of something to play with.

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