What would you do if your job were gone and there wasn’t any unemployment insurance to draw? What if you were disabled and your only income disappeared? This reality may not be too far in the future for many Americans. How can you prepare now for the next economic downturn?
Spending: First of all, start living below your means right now. If you don’t need it, take it back and get your money back. If you have two cars, chances are good that you could make do with one. How often do you use that boat? How much are you spending each week on eating out, entertainment, and shopping? All of that money could be going into savings for a rainy day. You may not believe it could happen again, but read reports about SSDI running dry in a couple of years and what that means for the American people. We already have more debt than we can handle, which is why we simply keep printing more money. At some point, that system will collapse.
Back to the Basics: What are the basics? Food, clothing, and shelter are the basics. Of course, most Americans also think a cellphone, cable television, and a car no more than two years off of the line are also basics. Whatever your basic needs are, cut out the rest and save everything you can. I recommend making a very strict budget and sticking to it. If you don’t absolutely need it, don’t buy it for any reason.
Food: Those hardcore coupon families may have a lot of free time on their hands, but they also have a lot of food to see them through some tough times. I’m not suggesting you build a massive hoarding basement of canned green beans and barbeque sauces, but you should have some basics on hand just in case. Rice, beans, seasonings, canned vegetables (or even better, canned veggies you’ve grown yourself), and so on. Devote one or two kitchen cabinets to foods that will keep. If you have a freezer, fill it up with foods you can freeze.
Less Dependent: Make yourself and your home less dependent on utility companies, the gas pump, and someone else writing your paycheck. Look into solar and wind power, having a well dug, implementing a heat stove, and finding work on the side; even if you currently have a job. This will cut down your bills and bring in more free money.