How to Prepare For an Economic Collapse?
Economic Collapse. Life post-Covid seems to be mask-free, but we’re left to deal with what could potentially be another massive economic collapse, bringing us back to 2008. At the time, the majority of the people were stunned and shocked by the financial crisis, unable to prepare for it. This time, we basically have the opportunity to do some preparation, so we’re not tragically affected by it.
After 2008, it’s only normal to feel anxiety and stress around financials, even if you’re doing well in your current job. The negative consequences of the economic crisis left people with large credit card debt, having to sell their houses and cars, move away to a cheaper place, decide not to have kids (because they can’t afford it), become deathly afraid of losing their jobs, and more.
And it seems that even though this happened 14 years ago, people are still traumatized by it, some never being able to get back on their feet. Some experts say that the economic collapse of 2008. was the catalyst for the mental health epidemic we are dealing with today. I would argue that it was also the catalyst for many autoimmune diseases and cancers as well, as stress and inflammation are known to affect the human body in the worst possible way.
Covid-19 stopped the world for almost two years, affecting millions of people worldwide, both health-related and financially. Its economic impact is huge, with the lowest-paying jobs being affected the worst, coming up to almost 60% of all lost jobs in the last two years. Thousands of restaurants, cafes, salons, gyms, studios, and other hospitality businesses closed, and airlines, hotels, and other travel-related businesses took a massive hit.
Medical institutions couldn’t keep up with the number of patients and beds, having to literally stop any non-urgent surgeries and check-ups, leaving many people without regular screenings which could potentially discover cancer and other serious diseases in their infancy with a much greater possibility of healing.
All of this has been a part of our reality for the past two years, and although it seems like things are looking up at the moment, experts are preparing us for another economic downturn, leading to a financial crisis many businesses won’t be able to survive.
This being said, there are some things you can do to prepare yourself for an economic collapse, at least as much as can be under your control. Here are some helpful tips you can apply and hopefully come out in a much better state.
1. Save Money
First and foremost, now is the time to start thinking about saving your money. Whether you open a savings account or simply start putting more money on the side, it’s a great financial routine you should adopt nevertheless. Sometimes we need a bit of a push to start working on our savings, but better late than never!
Even if it’s just 5-10% of your paycheck or deciding to eat more at home than in restaurants, just know that whatever you can put aside, you’re saving for your future. Limit unnecessary spending and stay on top of your financials. Knowing where you stand at every given moment is giving you power and control to make smart choices and rest assured you won’t end in the red at the end of the month.
2. Create an Emergency Fund
Hand in hand with saving money comes an emergency fund. It’s a sum of money you swear not to touch until an emergency arises and you absolutely need it. It can be a part of your savings or a separate account, but make sure to distinguish the two. Even though you might be reading this and thinking, whatever emergency arises I will be able to deal with it.
Unfortunately, if Covid taught us anything, it’s that you can never be too prepared – so many things can be out of our control and it’s better to know you have a safety net to fall on than get anxious just by looking at your bank account balance.
3. Be Smart With Food
There are plenty of ways to get creative and smart with food that will not only save you money, but also help keep you stocked in even the worst economic situation.
- Learn techniques of preserving food so you always have some in storage
- Invest in learning how to cook with leftovers so you can get creative even if you only have a few ingredients to work with
- Start growing your own food if you have the option so you can be self-reliant and don’t depend on the market as much
- Do a deep dive research into where to buy your food so you don’t end up spending 20% more for the same brand in a much more expensive store
4. Stock up on Non-Food Items
Skincare, shampoos, medical aids and supplies, batteries, and other non-food items you use on the regular are great to stock up on. They usually have a long shelf life and can last you for years to come. Every time I go to Costco and get a packet of toothpaste or cotton pads, I keep finding endless supplies of them in my storage. It seems like they could last me a lifetime.
Costco and other bulk stores are incredibly helpful in cases of economic recession as they allow you to save money while buying in bulk. Just make sure to have some storage space for all of these items, because they are bound to last you a while.
Additionally, stock on valuable tools such as kitchen equipment, handyman tools, and even gardening tools if you’re planning to grow your own food, as chances are, these items will quickly rise in price if they’ll even be available once the market crashes.
5. Build and Nurture Relationships
Even though this tip may seem out of the blue, trust me when I tell you it’s important. In times of crisis, having a community of people will mean everything. You’ll need to be able to share, help each other out, and potentially exchange services without the financial burden. For example, your neighbor mows your lawn in exchange for your help with babysitting their kids once in a while.
There are plenty of opportunities when you have a support system of people willing to help each other out. You never know what you might need and instead of searching for help once you have to deal with a problem, build meaningful relationships beforehand and feel good knowing you have someone to turn to when times get rough.
The economy of today’s world is not in a good state, and whether the predictions turn out the way experts talk about it or not, it’s always good to keep your financial health in a stable situation so no matter what crisis arises, you are well-equipped to deal with it. Money is not the most important thing in the world, but unfortunately without it, it’s almost impossible to survive. You know what they say: expect the best but prepare for the worst.