Lessons From The Great Depression
First of all what is a recession? “A recession is a significant decline in economic activity that lasts for months or even years. Experts declare a recession when a nation’s economy experiences negative gross domestic product (GDP), rising levels of unemployment, falling retail sales, and contracting measures of income and manufacturing for an extended period of time. Recessions are considered an unavoidable part of the business cycle—or the regular cadence of expansion and contraction that occurs in a nation’s economy.” via- Forbes.com
I can remember in the last 20 years (2000–2020) we’ve been through and survived at least 3 recessions. The most recent was 2020; during the Pandemic. It was said that this was the worse recession since The Great Depression. The recession was largely caused by government-ordered shutdowns to slow the spread of the outbreak of Covid. This caused investors to panic. The sock markets fluctuated like crazy. It was estimated that nearly 20.5 million jobs were lost. Millions of Americans also, resigned a.k.a. walked away from work. Small business temporarily closed.
As of 2022, US economy grew 5.7% in 2021 in rebound from 2020 recession. We are steadily hanging on. But economist and experts are predicting that a Recession is near. Some are saying it won’t happen and we have nothing to worry about. The smartest thing to do is to prepare. Here are tips to prepare and survive:
- Stock up– I’ve been hearing many talks of food shortage/possible famine. What if? Always prepare as if the worse will happen. It is wise to stock up on food, water, first aid kit, medicine. Start a garden. Life is very unpredictable.
- Stop being heavily dependent on your credit card– Stash away cash – We live in an almost cashless society. We have become so spoiled with our credit and debit cards. Get in a habit of pulling out cash and stash in a fire proof lock box and carry some on you. You don’t want to get caught in a situation where you can’t get access to your money in the bank.
- Live within your means- Just because you make money, don’t mean you have to look like it or blow money constantly. Budget! Live as if you are broke.
- Pay off debt while you can- The longer you play around and not pay down debt, the deeper you get buried in debt. Tackle debt while you are able.
- No need to create new debt – Ask yourself. ” Do I need this ?” If you do not really need it, its okay to wait until a later date. Focus on saving, stocking and creating more income to be able to sustain the effects in case of a Recession.
- Bonus: pick up extra gigs, invest, save. The goal is to have more income to have more flexibility and to be comfortable.
Lessons from the Great Depression
What we learned from The Great Depression was be prepared for the worse. Life is so unpredictable.
- Keep cash stashed away– Before the Great Depression, many working folks had millions sitting in the bank. Once the market crashed , the money disappeared as well. I’m learning to put away cash and not be 100% dependent on my cards.
- Come together. During that time, all people had were their family. They worked together to survive.
- Learn to reuse . We love to toss out things that we no longer need. People had to learn to reuse and salvage what they had.
- Be creative. People had to work with the tools they had .People relied on canning and preserving, and gardening. They also learned how to create electricity and cooling methods in the summer.
- Focus on what’s important – keeping family together, safe and focus on surviving.
