Monday, December 15, 2008

8 Simple Ways to Survive a Recession/Depression

Originally uploaded by Herr Marchi

My parents got married and had their first child (me) during the recession of the late 1970's. My grandparents and great-grandparents survived the Great Depression of the 1930's. I have had to live from paycheck to paycheck. I've seen a few movies that were set during the Great Depression. I'm also a history nerd, so I've read my fair share of books on past economic woes that have come our way. So I'm uniquely qualified to comment on this subject.

All kidding aside, most analysts are predicting 2009 to be a rough year economically. We were just told a couple of weeks ago that we've officially been in a recession since last winter. The media and politicians alike like to call our current downturn, "the worst since the Great Depression." In reality, our economic woes more closely resemble those of the 1970's. At least that is where they are at now.

Here are eight ways I believe one can survive the current downturn:

  1. Save. You should have been saving already, but if you're not, there is no better time to start than now.
  2. No wallowing. I explained what that was in an earlier post here.
  3. Do not panic. The media is looking for reasons to panic. Your co-workers may be starting to panic. Your boss may be panicking. You don't need to panic. When you panic you make poor decisions. Stay calm. Stay level headed, no matter how hard things may get. It's those who do not lose their heads who will survive any difficult time.
  4. Pay off your debt. If you have the money to pay off your credit cards, do it now. Don't use your credit cards as a rainy day fund. Racking up credit debt in a time of economic downturn will only drag out your economic downturn.
  5. Prepare a backup plan. Do not assume your job is safe from the economic fallout. If you find yourself going down with the ship, it will be much easier to handle if you have been preparing a backup plan. A second job, a side job, anything that you are doing for extra income should be cultivated. Who knows? You might just turn this rough moment in time into an opportunity.
  6. At times, escape. During the 1930's, the types of movies that were being made were what people today like to brand as escapist movies. Jazz and big bands also flourished during this time period. These movies and musical genres uplifted people's spirits. They removed them from the difficult realities they were facing day in and day out. Sometimes you need to get away. Find an escape.
  7. Examine your life. Find out what is really important in life, then take steps to enjoy those things. Do I really need to spell it out? Hint: It's not money.
  8. Think long term. I read somewhere (I think a dying newspaper) that the average recession since 1945 has lasted 10 months. However from 19oo-1945 the average recession lasted 18 months. We have no way of telling how long this one will last, or that it may morph into a depression. So prepare for the long term. You won't regret it.
Have anything else to add? Share it with us.


Chris McDaniel said...

Excellent advice as always, my friend. Now is a great time to clean out the closet or garage -- eBay and Craigslist can help supplement income or bolster savings!

Chris McDaniel said...

love the pic too, BTW... "Daa Daa Daa..."

Andrew Weaver said...

Very good point, Chris. Now is an excellent time to start cleaning out those closets! Hmmm... I may just get started myself.

And, "You don't love me, I don't love you." I hadn't even made the connection there. Good observation.

Lezlie said...

My husband works for General Motors and we are justly concerned about his job right now. Our response to this situation beyond our control is prayer.

Thom Singer said...

9. Network like your future depends on it. All opportunities come from people, so you need to start now to make, grow and keep your business relationships.

too many people wait until they are laid off to network. Dumb. Then you are showing up just to help yourself (taker). Meet people and find ways to help them all the time (giver), then when you are in a tight spot others will look for ways to be a resource.