When the U.S. implemented a lockdown due to the Coronavirus, this forced numerous businesses to shut down and countless people to lose their source of income. This raised concerns that a recession, or even a depression, is on the horizon. The ones who usually suffer the most during a market downturn are the people, especially those who are not prepared and are living month-to-month. Unfortunately, a recent study revealed that almost half of Americans live paycheck-to-paycheck. Furthermore, more than half of Americans couldn’t even safely write a check for over $500.
Though this is scary, it is not as dire as it sounds. Economies are cyclical, undergoing ups and downs. Many factors usually contribute to an economy going into a recession or depression. Greed and corruption are typically the worst culprits. As our history has shown, our economy always re-emerges from a downturn. To lessen the economic impact, we can look at the historical preparations that previous generations made so we can better prepare ourselves and our family from a potential economic depression.
In this blog, we’ll discuss 5 things you can do now if you’re concerned about a potential long-term economic depression. The points we’ll cover are from lessons learned studying previous times in history where major economic downturns impacted nations.
Know How To Change Your Diet
Food is going to be the most critical resource we will need during an economic depression. Not only because there may be an interruption with the food supply, but because many people can’t afford the food they are used to eating. Many are very dependent on other people growing, gathering, harvesting, and preparing most of the food that they consume daily. They go to grocery stores and spend money to buy processed and prep-prepared food that they can easily cook at home. Some people don’t even cook at all. They go to restaurants and pay others to prepare their meals. But during a depression, these things become a luxury that numerous people won’t be able to afford.
What this means is that you may have to learn to eat foods that don’t have the big three: soy, wheat, and corn. These three grains are the main ingredients found in most of the processed food available in supermarkets. Reading the labels, you will find that at least one of these three grains or their derivatives (like corn syrup, cornstarch, and corn oil) is the main ingredient included in a majority of the food you are buying. Skipping on foods that use these 3 grains is also good for your health since you’re adding variety to your food and more nutrients to your body. So, what other foods can you and your family consume that won’t put you in a financial burden or make you sick during a depression?
Early humans didn’t rely on others to plant, harvest, and process their foods. They foraged, hunted, and fished for the food that they and their family consumed. Even if you don’t live in the woods, it’s still possible to forage. There are numerous different fruit trees found in people’s yards or public parks that you can easily pick. In Oregon, many city parks have trees that drop walnuts on the ground. However, only local wildlife eats them since maintenance workers in the park just throw them away. Walnuts are just one example, there are many different varieties of foods that you can readily pick up in your environment. You can search the internet or go to your library and learn the different edibles found in your local area. Make sure you have a print-out of the research or a copy of the important pages in the book so you can readily look at it if needed.
You should also know where you can hunt or fish and what are the requirements. If the land is public, ask your local government what you need to do. If it’s privately owned, try and build connections with the owner. The key to foraging is knowing your environment and having a plan of action. We’re working on a future blog about foraging in the urban and suburban environments, so if you would like to know when that comes out remember to subscribe to this channel.
Build Your Library
Another thing you need to prepare for that can help you during an economic depression are books. It is important to build your library of books that can provide you with critical knowledge and information that you can use during the depression. We already mentioned earlier the importance of having books about foraging, hunting, and fishing to help you secure food when you are unable to purchase them at your local supermarket. Aside from foraging books, you should also have medical books, which you can use as a reference and guide in case you or someone from your family gets sick or needs immediate first aid.
Other helpful books that you can include in your library are language guides for your region and atlases. You should also have cookbooks and books about gardening, which can help you get through an economic crisis. Don’t forget to add some novels or other fiction books that you always wanted to read in your library. It’s easy to get stressed out, anxious, or overly worried during a depression. Having books that can let you temporarily escape your situation can help relieve your stress and keep you sane.
Having your own small library is critical since you never know how long the internet or electricity could stay on in your area. Having lived in impoverished parts of the world, you learn quickly that the power may not always be up and having a reliable internet source may not even be an option, especially at your home. It’s not wise to expect that they will always be available, so having a back-up plan is crucial. Even a small library of different books ensures you will still have access to information, as well as other forms of entertainment. We’ll put a link in the cards above and in the description section to books that you might want to include in your prepping library. We’ll also do another blog about building a prepping library in the near future.
Build Your Skills in Life and Vocation
Financial security will be one of the biggest concerns during a depression. Keeping jobs is going to be hard but finding a new one will be tougher. Though it’s a good idea to have an emergency fund so you’ll have access to money in case you get laid off, it won’t be enough. You also need to learn new skills or further develop the ones that you have. Having a new skill could potentially help you keep your job or make you an attractive candidate to other employers. You could learn a new language and become an interpreter. You could also learn or upgrade your skills with computer software applications.
Being an attractive employee is not the only thing you should consider. You should also develop skills that you can use to help you start a side business or a new vocation. Building a side hustle has become more and more popular in this new gig economy we currently live in. We have found websites like Lynda can provide you with so much quality information to learn a new skill set. You could even learn new skills that you always wanted to learn, like playing the guitar, or baking. Try and spend at least an hour a night pursuing a new skill that interests you. Again, there are many educational websites that can teach you many skills. Even if there are no jobs available at the moment, developing a new skill can help make you marketable in the future when the economy is back on track. But aside from making you a marketable candidate for job opportunities, a new skill can also help keep you sane and provide you a sense of accomplishment in an unstable world.
As we said earlier, stress and anxiety are going to be a common feeling during an economic depression. Though books can help you relax and keep sane, working on developing and improving yourself is also important. According to an article from Lifehack, as you improve and develop skills, you also get to learn more about yourself, thus improving your mental health. Even a simple workout program that you can follow during this period is a way to feel a sense of accomplishment. Speaking of mental health, one class we’ve begun to recommend to family members during this time where many of us are in quarantine is Yale University’s most popular online course which is now free online, “The Science of Well-Being”. We’ve gotten a lot of encouraging feedback from individuals we’ve recommended this to. We’ll post a link to the course in the description section below.
Work for Necessity not Currency
Working conditions during an economic depression will be different. The traditional work-for-money scenario where you work for one employer and receive a timely paycheck might not be reliable. In the current economic climate of the pandemic, many businesses in this situation are folding and filing for bankruptcies. You need to think outside the box here and see what other side jobs you can do other than traditional employment. You should also be willing to work for necessity and not currency. What this means is that you may want to work in exchange for other types of resources like food, water, or other items you may need.
For example, if you are good at carpentry and there’s a plumbing problem in your home, you might find a plumber in your community and negotiate with him to fix your plumbing problem in exchange for any carpentry task he has. You can also do odd jobs in exchange for resources. You can negotiate to mow a lawn in exchange for picking a few fruits off an apple tree in a neighbor’s backyard. You could offer to clean a neighbor’s garage in exchange for some eggs. Aside from manual labor, you can also use your knowledge. If you have a degree in mathematics or English, you can use it to do tutoring services in your neighborhood in exchange for various resources. If you are knowledgeable about gardening, you can offer to teach people how to start a mini garden in their homes. There are many things you can do in exchange for various non-monetary resources.
You will be surprised to see that people are willing to work for you or exchange with you if currency, which may be scarcely available or doesn’t hold any more value, is removed from the equation. You will also see that many skills will be in demand during a depression. In fact, many of them are likely to be more in-demand than actual goods, especially if the situation lasts longer. Skills like first aid/medical, gunsmithing, weaving/sewing, mechanical knowledge, teaching, tradecraft (plumbing, blacksmith, electrical), and even survival skills are the ones which will be in high demand. Possessing at least one of these skills will ensure you will have something of value that people are willing to barter for.
Adjust Your Finances
The last thing you will need to prepare for during a depression is your finances. Just because there is a crisis situation it doesn’t mean that your debts are automatically forgiven. They are still there and you will still be asked to pay them. Fortunately, there are programs that can provide relief and help you manage your debts and loans. During the Great Depression of the 1930s, the Federal Government passed the Farm Mortgage Act, which was a program to help farmers who were defaulting on their mortgage payments to the lenders. Some of the key aspects of the program were low-interest rates for farmers and principal forbearance. Forbearance is a program where borrowers allow a person to skip or make reduced payments during the duration of the agreement. It’s a relief program that lenders and creditors usually grant to borrowers instead of foreclosing on their property. It’s a win-win situation since borrowers will get temporary relief from paying their mortgage while lenders won’t have to shoulder the loss of property. Because of the Coronavirus, many Americans are already requesting forbearance on their mortgage payments.
Debt deferment is another program that can help in adjusting your finances and managing your debts. Debt deferment is a program that gives you a period of time where you are excused from making any payments at all because of certain circumstances in your life. The best program to really help your finances is debt forgiveness. Unlike the other 2 programs, debt forgiveness means you are no longer required to repay some or all of your loans. During the Great Recession, debt relief was one of the major reasons why some states recovered fast. According to a study from Yale Insights, states that were more generous in providing debt relief to people through the consumer bankruptcy system had an increase in local employment during the recession. It’s important to remember that each state will likely have different policies, programs, and requirements for their debt management programs. You should do your research and ask around so you know which programs you can take advantage of when the time comes.
Aside from managing debt, it’s also critical that you reduce your dependency on paper currency. When the value of the dollar becomes worthless during a depression, other means of exchange available will be precious metals or electronic payment modes. In this scenario, gold and silver will be valuable, since farmers and merchants will be more than willing to sell their goods and services for an ounce of precious metal bullion. Precious metals retain value when currency does not. We’ll post a link in the description section and pin a comment linking to the website where we personally purchase my precious metals. Electronic payment modes like PayPal and Venmo may also be valuable, especially when banks fail. If you have some balance on your accounts, you can use them, at least temporarily, as a way to pay for goods and services. We’ll be talking more specifically about precious metals in a future blog.
Conclusion
With the way the Coronavirus pandemic is affecting businesses and economies, it’s not far-fetched to think that the next issue we might face is an economic recession or even a depression. Because economic downturns are cyclic in nature, it’s important that we properly prepare ourselves for that eventuality.
To summarize the main points discussed in this blog, the first thing you need to know is that food is going to be the most crucial resource during a depression. The situation will have a significant financial impact on countless people, which means many can’t afford to buy the foods that they want to eat. Changing your diet and knowing edible foods that you can easily pick up within your area will be a key to your survival. Second, you should consider building a library of important books that can provide useful knowledge and information during the depression. You should also learn and develop new skills, which can help you keep a job or make you an attractive candidate for companies during a recovery. It’s also important that you think outside the box when it comes to working during an economic depression. The traditional way of working won’t be reliable during this period. Being able to work for necessities instead of currency will increase your chances of surviving and even thriving in this situation. Lastly, it’s important to remember to adjust your finances. There are many different programs you can search for that the government provides to help consumers manage their debts during a national crisis.
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