The prospect of another recession is almost too much to bear after the hardships and the shock created by the most current one, but actually, hard times can bring opportunity as well as difficulty. Living through a severe recession forces most people to reevaluate their lives and their expenditures; to change anything about the way they live that has caused them problems when times get hard.
The following suggestions are not new, but they are all effective ways to recession-proof yourself forever. Adopting even one or two can make you more resilient and secure should another recession hit at any time:
1Pay Off Your House
2Live Below Your Means
If you don’t own a home, now is the perfect time to buy one: for cash. Thousands of homes are sitting vacant, unwanted even at foreclosure tax sale at any price. If you can scrape together several thousand dollars you can bid on such a home and own it outright, so that at least you will always have a roof over your head. Make sure you check it out thoroughly for structural defects and don’t buy anything you can’t fix. Too many people buy far more home than they can afford simply because a bank will loan them money to do so. Don’t fall for it.
3Keep a Record of What You Spend
It’s easy to tell other people to do this but it’s harder to actually do. The best way is to carry a small notebook around (the size that fits into a shirt pocket) and use a page a day. Write what you bought and the amount, and then total it. When you see where your money is going, extrapolate out for the entire year. For example, if you buy a couple of pops at work each day at $1.50 each, that’s $15 per week, or $780 per year. $1.50 sounds like no big deal, but $750 is a new refrigerator. Once you see the cost of small items, you can make better decisions about which ones are really worth purchasing.
4Protect Your Savings
The U.S. dollar fluctuates in value. During hyper-inflationary times (the kind that accompany very severe disruptions in the economy), the dollar can become almost worthless, wiping out any cash you have saved. Put at least part of your money in gold, silver, or gold-backed currency like the Swiss franc. Buy land. (As the saying goes, they “aren’t making any more of it.”) Make sure your savings are diversified and that only three months worth of salary is sitting in a liquid cash account.
5Grow Your Own Food
If raising crops were easy, nobody would buy them at the supermarket. However, almost anyone can keep a kitchen garden and grow a few beans and tomatoes. Potatoes and sweet potatoes are also easy to grow and can be cultivated in a small space by stacking tires filled with dirt one atop the other and cutting holes in the sides for the starts.
At the end of the season, just take the tower apart and harvest the potatoes. Fruit and nut trees and berry bushes can be worked into decorative landscaping even in city neighborhoods. During hard times, growing your own food can save you thousands of dollars and keep your family fed.
For more information, read our article on growing your own food.
6Barter Out of Habit
Never pay money for anything if you can trade goods or services instead. The better you get at finding what you want without using cash, the more resilient you’ll be when no-one has any. Bartering is also a good way to make friends and develop a support network, something that is crucial when times get tough.
7Go Off Grid
It’s great to be concerned about your carbon footprint, but an even better reason to invest in renewable energy sources is cost. Over time, ‘green’ energy sources like multi-fuel stoves, solar collectors, solar water heaters, wind generators, and passive solar all have the effect of reducing or eliminating public utility bills and making your family more self-reliant. In some parts of the U.S., you can even sell excess electricity back to the utility.
8Wear it Out, Use it Up, Make it Last
Earlier generations lived by these rules. If someone had a warm coat and the button fell off, that person sewed the button back on. If a set of dishes was intact that was good enough: people didn’t run out and buy new ones just for show. Squeeze the last of the toothpaste out of the tube, save soap slivers and make liquid soap, use up leftovers.
