How to Survive an Economic Depression

How to survive an economic depression? If the current recessional trends in the United States and the world continue, large portions of the world population could find themselves moving into a major economic depression. This is a period in which the value of currency declines drastically; unemployment increases and many people find it difficult to afford basic needs such as food and medicine due to the combination of unemployment and currency devaluation. This is a potentially crippling possibility for many but there are preparations that you can make to minimize the effects on yourself and your family.

We Are Family Support Network

The first survival tactic takes a lesson from the Great Depression of the 1920’s and 1930’s: families are the strongest support network so use them. If multiple family members are struggling due to job loss or decreased wages then you need to pool resources and help each other survive.

• Two families sharing one house and the associated expenses is preferable than both families having nowhere to live because neither can afford it on their own.
• Spreading expenses across a larger group leaves more money for food and carries other advantages as well.

Extra people may mean in-place babysitters that allow child care expenses to be eliminated.

Pay Off Debt Before the Depression

Another essential factor in surviving a depression is to get rid of as much personal debt as possible before the depression arrives.  As a depression develops and currency devalues, you are paying off debt incurred at pre-depression levels.  This means that you are actually becoming less efficient at paying down debt because the money you are now using to pay with is worth less than the money you incurred as debt.

• Postpone any new purchases that would incur new debt.
• Maximize the effort to pay off existing debt.
• Establish a cash reserve in a form untouchable by bank and government failures.

Many economists also recommend precious metals acquisition in moderation.  As gold skyrockets beyond the reach of many to invest in, silver can provide a good alternative for a failure proof cash reserve.

Reduce Spending to Survive

If currency devalues and what you earn buys less, then plan on reducing what basic needs you need to spend money on during an economic depression.

• Even a small backyard can provide enough space to start a simple garden.
• The more self-sufficient you can become in terms of food consumption, the more available cash you possess to pay for essentials such as rent/mortgage and utilities.

Many neighborhoods often have common areas that could be developed as a community garden for crops that require more growing space.

Know Your Neighbors

Make friends with your neighbors. The current recessionary climate has seen a return to barter as a medium for paying for goods or services so make this work for you.

• If an electrician or plumber lives in the neighborhood, see what you might have to offer them in return for their expertise.
• Trading babysitting or a basket of tomatoes for a sink repair may not seem very modern, but in the middle of an economic depression it surely makes a great deal of common sense.
• Along these lines, acquiring good books on basic home repairs and a set of hand tools is also advisable.

Again, the more that you can do yourself means the less of your devalued currency you have to pay someone else.

Stock Up

A major economic depression can disrupt production and delivery of goods and services. It is a good idea that if signs of a depression are increasing, stock up on certain vital goods.

• A six month (or more) supply of personal medication and useful over the counter items could save you money in the future.
• Batteries, light bulbs and toilet paper are examples of everyday necessities that are easy to store and could even have significant barter value if times really get tough.
• Flour, sugar and basic essential cooking supplies can be bought and stored so that they will remain usable for long periods of time.

This does not mean people should buy an arsenal of weapons and three years of freeze dried food or prepare to move to a cabin in the woods.  Common sense, however, says that staples of daily usage that can be interrupted by business or transportation difficulties should be acquired in advance when they are readily available.

Bottom Line: Self-Sufficiency

The real key to surviving an economic depression is self-sufficiency.  Being able to at least partially feed your family and keep your own home and car repaired either through acquiring those skills or trading for them stretches your hard currency supply. Pay down debt, save cash and lay in essentials and prepare to ride it out.