Category: The Future

Live everyday like it’s a recession

Life in 2013 is good for most of us. Especially with the economic upturn, the soaring record-setting stock market, and the ever decreasing unemployment numbers. Some of us may even have this crazy thing called “job security”. I know I do, and that feels pretty swell.

Looking around my own neighborhood I see people spending money having work done on their homes. Wherever we’re shopping or eating lunch there are always a ton of people flashing their credit/debit cards. A fleet of brand new gas-guzzling SUVs and soccer-mom mobiles line every interstate from coast to coast.

It’s hard to think that only a few years ago, this country was devastated by a major recession. The “Great Recession” they deemed it. There were 10s of millions of people out of work. If you followed it for 5 seconds you would know that pretty much the entire Presidential campaign was focused on the regrowth of the economy.

With the economy booming again don’t you think it’s time that we sat down and actually talked about the recession? No, not the one that just passed, silly goose. The next one, that could happen as soon as this year.

There have been 12 recessions since World War II with an average time between recessions of just 5.666 years. If you remember, the last recession officially started in December 2007 even though it may have been a while until the entire country (and the world) felt the impact.

Fortunately, we’re past the 5.5 year mark now, and it doesn’t look like the economy is going to be nosediving anytime soon.

Whether the next recession happens in 6 months or 50 years from now, families need to take into account that there WILL be another recession and it’s time to start planning how to survive it. HBO has a new documentary series called American Winter that follows the stories of a few Middle Class families and how they fared through the Great Recession. To save you from having to watch it, I’ll sum it up in one sentence: Most of the families in the show were reduced to dumpster diving and soup lines.

And these were Middle Class families…

You personally might have avoided the soup line, so you may be wary of this cautionary message. But the truth is, there’s no way to predict who will be affected, and how severely, until it actually happens. So why not be prepared just in case? I know that we will be. Will you?

How do you prepare for a recession? Some people might think a shotgun, shells, and non-perishable food is all you need. If only that were the case! You need money, sucka!

If you can pare your spending down to 50% of your takehome income for one month then you can survive exactly one month of a recession without changing your lifestyle. Think about the magnitude of that! In one year you could essentially save up enough to live one entire year without needing a paycheck. If the recession hits your sector specifically, you may be without a paycheck for a while.

When your boss eventually gives you the can, if you’re prepared, you can say to him/her “Thank you, it’s been really nice working here. I know the economy is in the shitter. Hopefully there’s room for me when things improve.” And you can freakin’ mean it too. Your boss will probably look at you funny, but you know what? They may just keep your record on file, in hopes that you would grace them with your employment one day when the rainbows and sunshine are back.

Savings should be kept fairly liquid as well. We all know what happens to the stock market at even the slightest hint of the word “recession”. That means that you shouldn’t keep all of your savings in stocks. CDs or high-yield savings accounts might be your best defense against a terrible economy. I’m not saying you should get out of the stock market, or shouldn’t invest, you should just have a balanced portfolio, and yes that includes cash-money.

Think about what kind of life you would live if you woke up tomorrow with the country in recession, no job, and no sign of any available. Would you continue with your swanky, high-profile lifestyle? Would you consider an iPhone data plan a necessity? Would you still be subscribed to cable TV? Or would you have to live your life on credit, because you weren’t prepared?

I know we like to act super Fancy when we have jobs, because we all live in the moment. I think that it’s because most people don’t even think two weeks into the future. How could they ever plan for something that they don’t even realize is a possibility? Well, I’m here to say recession isn’t a possibility. It’s a guarantee.

Live everyday like there’s a recession going on and once the country is in recession again, it won’t even phase you. That doesn’t mean dumpster dive, it means: learn to live on less money.

But how do I learn how to live on less…?

Lucky you, that’s what this entire site is dedicated to!