The economy seems to be unpredictably swinging every which way. Or at least it does to my uninitiated eyes. Some economists may know the trends and the factors, and be able to map it all into something predictable and easy to comprehend. If they can do this I do not know of it yet. All I can say is we have experienced some pretty tough times, and there is likely to be more to come. Here are some tips for preparing for an economic downturn:
Put money away in advance for an emergency fund.
Hopefully, the worst case scenario never happens to you, but the fact of the matter is it has happened to many. Start putting some money away now, and make efforts to save. In the event of an emergency at least you will have some money spare to give you some time to formulate a plan. If it doesn’t happen it never hurts to have spare cash lying around anyway.
Cut back on spending now.
It can be difficult to cut down on spending, especially if we try to make too many changes at once. Take a gradual approach to lifestyle changes and spending habits. Switch to cheaper electricity and gas companies, mobile contracts, and tally up all expenditure to see where your leaks are. Take the opportunity to cut back on vices that cost money. Doing this now will make hard times easier, and will help you to save up some money too.
It’s not something anyone want to do really, but if you are living beyond your means, or right on the edge of your cash flow, consider doing some downsizing. Move into a smaller home with a more affordable mortgage, or rent somewhere for cheaper.
Make efforts to cut down on debt.
Now is not the time to be getting into more debt. Try to make an effort to pay off existing debts before another economic downturn happens. Debt collectors can get ruthless, and nothing can make the situation worse than having debt recalled when things are bad enough already.
Try to spread yourself wide.
Put your eggs in many baskets so to speak. If you can source income from a few different places you face much less risk in life in general, more so in an economic downturn. Look out for other means of income, whether they be part time jobs, investment opportunities, or side projects. Consider starting a small business, perhaps an internet venture that has low start-up costs.
Store what you can.
Everyone has their own view on this, ranging from extreme survival to utterly pointless. If you are concerned about preparing for an economic downturn then you may want to store food and other goods. The degree that you do this is up to you, but it can never really hurt anyway; we can only store what can keep well. The global food bank reserves are considerably low, and food prices are likely to rise even more if another economic crisis comes around. Some foods can be stored, including tinned fruit and vegetables, and the preparer could also consider hygiene products, medicine, and any other supplies such as useful tools.
This is the approach I want to take in the long run. The option is not available to everyone, I understand. People live in cities because jobs are in cities, and jobs are in cities because people live there. If you do have the opportunity consider moving somewhere rural. Going rural keeps you out of the way of any city chaos, and also provides you with the means to try to take more responsibility for your own basics.
Grow your own food.
Having responsibility over your own basic resources is, I think, the most effective way to remain unaffected by the workings of the economy. When we cultivate our own food we can reduce our costs, and live a healthier diet for less. The more we can grow the better, and if we ever get to the point where we have more than enough, we can trade or store our food in preserves and pickles. Many of us have lost touch with these skills, but they are not hard to get back. We can learn online, attend a course, learn through someone we know, or through experience and trial and error. Start now if you want to prepare, and use what land is available to you. Even a small garden is enough to get a good amount of food going, and indoor growing is also possible. You could also consider learning how to source your own energy.
Community and support.
When the going gets tough, we must pull together. That is the bottom line, I think. We cannot always rely on the situation self righting; we must work together, as human beings, to make sure we all get through it. We must help our neighbor and form communities based on sharing and caring. Support networks are important, as is love. Look after yourself, and each other.