If you are worried about America facing serious economic problems, you’re not alone. A survey by Finance Buzz found, “Recession fears are growing: 72% of Americans are worried about a recession happening within the next year.” Moreover, unlike the 2008 recession, more Americans are concerned we are approaching another Great Depression as a result of the 2020 pandemic. Unfortunately, there is a real reason for this comparison. Nicholas A. Bloom, professor of economics at Stanford Graduate School of Business, who works with the Federal Reserve Bank of Atlanta on its monthly Survey of Business Uncertainty, says, “People may end up calling this the Greater Depression. […] I think the drop will be comparable to the Depression. The only question is about the rate of recovery.”
Causes of the Great Depression That Should Make Us Take Pause
There is a common misconception that the Stock Market Crash of 1929 was the cause of the Great Depression. While it certainly played a major part in the depression that left 15 million Americans unemployed and half of the country’s banks out of business, the stock market crash was the straw that broke the camel’s back.
Before the stock market crashed, multiple things occurred that put the American economy on shaky ground. Here are the different causes of economic concern before the Great Depression:
- Production declined.
- Unemployment was already on the rise.
- Stock prices were higher than the actual value.
- Wages were low.
- Consumer debt was high.
- The agricultural sector was struggling.
- Consumer spending slowed.
- Factory production slowed.
Read through that list again and check off the ones that are occurring.
Add in volatile oil and energy prices, and it’s no wonder the experts predict a Greater Depression is on the horizon. All the more reason to take steps today to prepare for the Greater Depression tomorrow.
Take Advantage of the Time You Have Now
We’ve written Survival Scout Tips about how people survived during the Great Depression, but today we’d like to look at the Great Depression from a different angle. Rather than survival during the Great Depression, let’s consider the steps to take ahead to prepare for the Greater Depression since experts believe it may occur during our lifetime.
Before the Great Depression, there were windows of opportunity that some people took advantage of, such as diversifying their income. Because hindsight is 20/20, we can learn from history and use this knowledge to make better decisions to protect our livelihoods in the event of a Greater Depression.
Here are 20 things you can do today to prepare for the Greater Depression.
#1: Secure Your Income
During the Great Depression, millions of people lost their jobs. However, the percentage of women employed grew. According to The History Channel, “From 1930 to 1940, the number of employed women in the United States rose 24 percent from 10.5 million to 13 million. Though they’d been steadily entering the workforce for decades, the financial pressures of the Great Depression drove women to seek employment in ever greater numbers as male breadwinners lost their jobs.”
One of the reasons is because women took on more stable jobs, such as nurses and teachers. During the pandemic, we quickly grew accustomed to hearing about “essential workers,” or those workers who were needed to keep America running while other businesses closed.
Take steps today to make yourself essential. Do what you can to make your boss see you as an irreplaceable asset. Not only will this keep you employed during an economic upheaval, but it will also better your chances of receiving a raise or moving up the ladder.
#2: Reduce Your Spending
If you follow step one and increase your income, don’t fall victim to lifestyle creep (where you start spending more as you earn more). Instead, do just the opposite. With economic upheaval on the horizon, this is not the time to live large. Instead, look for opportunities to reduce your spending. Look for ways to lower your utility bills and insurance, get rid of unused subscriptions, and stop buying new just because you can (i.e., you don’t need the latest cell phone model).
#3: Get Rid of Debt
Take the extra money you are earning and the money you are saving for reducing your spending, and use it to get out of debt. Forbes explains, “Debt is a problem even when the economy is booming. But it’s an even bigger problem during recessions, when you may be facing the possibility of losing your job or experiencing a serious decline in the value of your investments.” The fewer debts you have, the better your chances are of making it through the Greater Depression.
#4: Build Up Savings
In addition to getting rid of debt, you need to build up your savings. Sadly, many Americans do not have emergency savings accounts. If another depression does occur, emergency savings will go a long way toward protecting your family.
#5: Diversify Your Income
When it comes to income and savings, avoid putting all your eggs in the same basket. Instead, diversify. Not only is this the way most millionaires become millionaires, but it is also simply a smart financial strategy. For example, if your company shuts down during a depression and that is your only source of income, you will not have any more money coming in. In contrast, if you start a side hustle today or make wise investments (such as sin and comfort stocks, gold, or precious metals), you will have other means of survival.
#6: Don’t Live beyond Your Means
Many Americans don’t see any problem with living beyond their means. According to U.S. News, “Experts agree that it's bad, and even dangerous, to be in a sustained situation of having little or no emergency savings (let alone adequate retirement savings).
But just like the partially-shut down federal government, which relies on borrowing to stay afloat and risks another downgrading of its credit rating should the shutdown persist, Americans are unable, or unwilling, to live within their means, analysts say. Credit is much easier to get, and has become a convenience instead of an emergency tool, experts say.”
Many Americans use credit cards or bank loans to “purchase” pricey cars, designer clothes, and luxury vacations – things they actually can’t afford but trick themselves into believing they can because they have a credit card.
#7: Keep Cash on Hand
Nowadays, it is common for people to rely on their debit or credit cards for all their purchases. As the Great Depression showed us, we shouldn’t put all our money in one bank. That doesn’t mean you need to rush to the bank and put all your cash under your mattress. Instead, make a point to always have emergency cash on hand.
#8: Grow Your Knowledge
Not only will growing your knowledge base make you irreplaceable at work, but it will also help you out at home if a Greater Depression occurs. For example, start expanding your knowledge of common household substitutes and DIY solutions. If a Greater Depression occurs, you won’t be able to get everything as easily or afford a handyman. Therefore, it is wise to learn how to do as much as you can independently.
#9: Store Food and Water
One of the first things that will run out during the Greater Depression will be food and clean water. Once items do return to the shelves, they may be rationed, or prices may be exorbitant. We’ve seen this firsthand during the coronavirus panic. Since we know natural disasters and economic upheaval are always possibilities, it is wise to store long-lasting emergency food and tools for water filtration.
#10: Stockpile for Inflation
Similarly, begin thinking about nonperishable items that will likely increase in price due to inflation should a depression occur. Consider the things people panic bought in 2020 and stockpile them today. Items such as toilet paper, coffee, batteries, ammo, and paper products will likely rise in cost. If you stockpile them today, you will save money tomorrow and may even use them for bartering.
#11: Learn Survival Skills
During the Great Depression, many people ended up homeless. Sadly, this may happen again if homes are foreclosed and cars repossessed. If this happens, how will you feed and shelter your family? Take time today to learn survival skills, such as how to build a fire and purify water.
#12: Purchase Land
One of the best things you can do now to protect yourself during an economic depression is to purchase a cheap plot of land in a rural area. In addition to being an asset, the land can be a safe place for your family to go. Plus, if you own your own land, you can grow your own food and not depend on grocery stores.
#13: Have Other Types of Currency
Yes, you need cash in your emergency savings. However, if the banks fail, cash will not hold the same value. This is why it is necessary to have other types of currency as well, such as gold and minted silver. You may also want to consider currency outside of the U.S., such as Euros.
#14: Keep Extra Medicine
If the economy spirals out of control, then it will be harder to access healthcare. For this reason, stock up on extra medications – especially prescriptions. See if your doctor will prescribe multiple months at a time or if your pharmacy will fill orders in advance.
#15: Grow a Garden
One of the ways to survive the Greater Depression is to know how to grow your own food. Learning how to grow a garden will help you whether or not the economy goes south. You will save money, eat healthier, and feel a sense of pride.
#16: Raise Your Own Meat
If you can purchase your own land or already live somewhere where you are allowed to own farm animals, now is the time to start raising your own meat. And as one woman who survived the Great Depression shared, "Poppy always said the world turns and everything that has happened would happen again. I am sure if he were still with us today, he would be warning us to start a garden and buy some chickens."
#17: Invest in Hunting and Fishing Supplies
During the Great Depression, many Americans survived because they knew how to hunt, fish, and forage for food. In addition to learning how to do so, you should invest in the tools and supplies needed. During the quarantine, widely used gear, such as bikes, were hard to come by. During an economic depression, these types of supplies will be difficult to find.
#18: Know What and How to Barter
During the Great Depression, bartering was a common means of survival. Look through your home and consider what you own that you could barter if needed. And don’t stop with physical goods. Consider what skills you have that you can use for bartering.
#19: Reuse and Recycle
Rather than throwing away something once it is used, find ways to reuse or recycle it. This habit will go a long way during an economic collapse. For example, resourcefulness during the Great Depression included everything from using up every vegetable in depression soup to reusing flour sacks for dresses.
#20: Strengthen Community Bonds
Get to know your neighbors today. During times of crisis, you need your neighbors. It is better to get to know them now rather than during a disaster. If so, you’ll know who to turn to when you need a certain tool, skill, or recipe. You’ll also know whom you can trust.
Start preparing for the Greater Depression today, friends.
Preparedness Advisor, My Patriot Supply