Look around you and chances are you will be able to find someone who is worried about recession coming. You may be one of those people. If so, you may be worried that your family won’t know how to survive a recession. The answer of course is like most emergencies – you learn how to prepare for a recession before it happens.
When the US went through the Great Recession (2007-2009), so many were caught off guard. Most eventually recovered, but the harsh truth is that there are still folks today who never did. If someone is truly worried about how to survive a recession, they may be one of those people or know someone who is.
How to Prepare for a Recession
A recession can do a lot of financial damage not only to your personal finances but your job, your local stores and more.
Anyone who says they won’t be affected is someone who did not pay too much attention the last time or someone who does not understand what a recession is.
What is a Recession?
If you’re reading this and you’re asking, “what is a recession?” I can explain it pretty easily.
It is when the GDP (gross domestic product) of the US is down for two or more financial quarters.
In simple terms, a recession is when the economy slows down. Unemployment rates tend to rise, but inflation tends to go down which lowers the price of the goods you pay.
This may seem like a good thing, but if you are one that loses your job, how are you going to pay for those cheaper goods?
It is a circle that pretty well affects everyone.
What is GDP?
GDP can be explained as the total value of a country’s final goods.
To put it simply, to calculate GDP, total up all the goods, services and products the US creates or provides.
You will have a very large dollar amount. That dollar amount would be the GDP of the United States.
How to Survive a Recession
To begin preparing for a recession, you’ll first need to adjust your mindset. If you are truly worried about it, it shouldn’t be hard to make the change from spending to preparing.
Start Saving Now
The biggest and most important recession survival tip I can give you is to start saving now while you can.
When a recession hits, if you are one of the ones who loses their job – or if your company suffers – your savings account could be your savior.
Ideally, you want a minimum of 6 months living expenses, but the truth is that any savings is better than none.
If you need help saving, having a savings account at a bank like CIT Bank can help. When you don’t have instant access to your savings, it is far easier to build that savings.
Savings is not limited to a bank account
When I say to start saving now, I don’t just mean in a savings account. I mean in every aspect of your life.
If your groceries are costing too much, work on ways to save money on groceries. Sign up for apps such as Ibotta and sign up for Prime Pantry to help you save even more.
If your power bill is too high, use a few extreme frugal tips to save money on your electric bill.
If your overall spending is too high, knock it back with general extreme frugal living tips.
If your housing costs are too high, consider downsizing to live in a hotel and watch your savings skyrocket. Just be sure you research a few tips for living in a hotel first so your hotel home is comfy.
The more you can do to save money now – before a recession begins – the better off you will be.
Make as Much Money as Possible
As I’ve already told you, one of the biggest hurdles people face during a recession is that unemployment rises.
This means that along with saving as much as possible, you should also be earning as much as possible.
This could mean doing things like starting your own blog to earn money from or creating a different home business idea.
Take the time to sign up for a Swagbucks account and to sign up for an InstaGC account and you can complete surveys and searches to earn money. I’ve been a member of both for years and still use them to boost my income.
Build a Stockpile Now
Another way to prepare for a recession is to make sure your family has good food in case the worst happens.
The truth is that a recession that gets bad enough, turns into a depression. Anyone who knows any bit of history knows how bad that can get.
Taking the time to build a food stockpile now will help you later on if for some reason, you must skip grocery shopping for a week or two.
Learning how to build a stockpile on a budget isn’t too hard to do. You just need to be ready to shop when the sales hit.
Learn a New Skill
These days, we live in a world where having that right set of skills is a rarity. There are numerous frugal (Six Dollar Family) living skills that you could learn. Each one of them would be considered a recession survival skill.
All of them will help you learn how to survive a recession.
- You could learn frugal tips from the Great Depression to help.
- You could learn how to fish for food.
- You could learn how to make homemade foods instead of buying them.
- You could learn which frugal ingredients can stretch a meal for cheap.
- Or you could learn which pantry ingredients to keep in a frugal pantry.
Every skill you learn now will help you later.
Pay down debt while you can
Debt during a recession is bad juju which means that those that are worried about preparing for a recession should make paying it off a priority.
One of the reasons so many people lost their homes during The Great Recession was they owed more than they could pay off during a recession.
Don’t allow that to happen to you.
Whether it be your car, your home, a credit card or whatever you may owe on, make sure to pay as much debt off before a recession hits.
Don’t Panic
Lastly, and this one is important in any emergency, don’t panic now or after a recession comes.
Panic will only cause you to lose your wits so to speak. This could lead to spending more money than you can afford on things you don’t need or other bad decisions.
Just use the tips for how to prepare for a recession that I’ve outlined in this post, keep yourself updated and roll with the punches.
Did you enjoy this post? You may also like:
- My Favorite Money Savings Tools and Ways to Make Money
- 32 Frugal Living Books Everyone Should Read
- The Only 9 Budget Tips You Will Ever Need to Learn How to Budget Your Money
Are you worried about a recession or do you know someone who is? What are you doing to prepare for a recession?