How to Prepare Your Family for the Next Depression – Simple lifestyle changes you can make to help you and your family feel more prepared to deal with the economic downturn.
Times are tight, prices are rising, layoffs are everywhere, and jobs are scarce. It seems like houses are going into foreclosure all around us, and everyone from the neo-conservatives to the ultra-liberals are predicting things may get worse before they get better.
Most of us are at least a little worried about how bad things will get, and in many cases, that worry is having as much impact on our daily lives as the economic changes are. While even economic gurus are debating about whether this is a great time to invest or time to play it safe, here are some simple things you can do to help make you feel more secure and better prepared for whatever the economy holds in store for us.
As a bonus, all of these tips are designed to be useful and beneficial whether this is just a little dip in the financial road or the precursor to something dire.
Save – It sounds overly simple, but building a nest egg is one of the most satisfying and reassuring things you can do to prepare for economic challenges. Most households have little, if any, savings. Put a minimum of 10% of your household income into a safe savings account somewhere before you start paying bills or spending on groceries. Most families can create the 10% buffer for savings simply by reducing unnecessary impulse and entertainment expenditures.
Reduce Impulse Spending – Any time you pull out your wallet, think about whether you really /need/ that item. Get into the habit of putting off /wants/. Many impulse purchases are a result of a very temporary desire, and if put off, the buyer will not only never come back to buy it, but won’t ever regret having not purchased it.
Quit Spending For Luxuries – America has become a nation of privilege, especially over the last 4 or 5 decades. Our idea about our daily basic “needs” has grown to include a lot of luxuries that the media (or our own sense of entitlement) tells us are necessities, but really aren’t. There is no shame in cutting out luxury expenditures and looking for free or inexpensive alternatives. Name brands can be replaced with store or generics, in most cases with no noticeable change in quality. Eating out can be replaced by packing a lunch and cooking at home. Gourmet drinks and coffees can be made much cheaper at home. Reducing expenditures on non-necessities can go a long way towards feeling and becoming more financially stable.
Reduce Entertainment Costs – While the temptation exists to throw money at our anxiety over the economy and buy a few hours of “thinking of something else” in the form of going out to the movies or building an ever-increasing pile of movies, video games, music and the like. There are cheaper and more responsible ways to distract ourselves. Most libraries have not only books but movies and music, and many of them now have passed to local activities like museums available as well. Do some research to find out what resources for free entertainment are available in your area. Many communities have a wide variety of free or low-cost activities, including movies, interesting recreational classes, sports activities, hikes, lectures, and more. Many cities with art galleries offer a once-a-month free admission, as well. For those with computers, Pandora.com and other free music listening sites can substitute in for buying the latest CD. The internet also offers a wide variety of video games, and Hulu.com offers free television programming. If you’re going to make an entertainment purchase, consider the benefit to cost ratio. How much enjoyment will you get out of the purchase compared to the price? Replayable movies/music and games may provide more “bang for your buck” than something purchased on a whim.
Build a Pantry – Regardless of whether you live in a mansion or a studio apartment, having a well-stocked pantry including food and other household necessities is an extremely reassuring feeling. Building up to a six month supply of food, water, paper products, and toiletries serves a double purpose. First, it provides a buffer in case prices skyrocket or income plunges. Knowing you can feed your family for a couple of weeks just out of what’s in the house takes a great deal of pressure off. But perhaps as importantly, building a pantry of non-perishable foods and items that your family uses on a regular basis allows you to save money as well, by stocking up on regularly used items when they’re on sale.
Take Care of Yourself – Making wise choices for your daily lifestyle can go a long ways towards feeling prepared and empowered to deal with other challenges. If you’re a smoker – stop. A pack of cigarettes a day not only can cost upwards of a hundred dollars per month or $1,400 a year, more than many families put into savings. As well, the costs for increased health care throughout a smoker’s life due to increased susceptibility to colds, viruses and other diseases (as well as emphysema and cancer) can be staggering. Daily exercise, even if it’s just going for a walk, not only provides inexpensive entertainment but also can have marked health benefits. If you currently have access to medical services, take full advantage of it now. Declining economies can mean layoffs, benefit reductions or increased cost for services – don’t put off using them now, just in case they’re not around next year.
While no plan can completely prepare a family for what might be around the corner economically, even small changes can help put them in a better position to deal with the unknown. Implementing some of the above suggestions might not only help provide your family with a little buffer if things do get worse, but are also positive lifestyle changes regardless of what the future brings. So, rather than stress about the unknown, focus some energy towards making tangible change for the better.