How to prepare for a recession

With the worldwide economy pretty all over the place I was thinking how prepared are we all for things to go really pear shaped? I know here in Australia it has been pretty ok for the most part. There have been job losses and sales have been down etc. but we have not been hit anywhere near as hard as other countries.

That doesn’t mean we are invincible though.

So what sort of things can you do to prepare?

There are simple things you can do like start living frugally now, so that you don’t feel a massive lifestyle change if you were to lose your income.

–       Pay off your debt, but at the same time save money. Obviously the less debt you have the better off you will be, but if you lose your job you will need a bit of a financial buffer to help you.  If you can start saving a set amount of money each week, but also look for ways to make more money and use that extra cash to really pay down your debt.

–       Learn to do things yourself. I have started doing a few DIY posts recently with more to come. The more things you can do yourself, or at least know how to do yourself the better off you will be.

–       Compare, switch and save. Compare credit cards, mortgage rates, loans, savings, bills, everything. If you find a better deal switch now, while you have a steady income. Once you lose your job it is much harder to switch anything or get help.

–       Know what native plants are edible and where to source free food. Obviously the more people who have lost their jobs, the more there will be trying to source free food but if you know where edible plants grow and start bartering and things with friends and neighbours now, swapping surplus etc. you will be a step ahead.

–       Grow food. If you can grow some food, get chickens, water/rain tanks etc. Even if you can grow some herbs and tomatoes, every bit will help you. Plants like aloe vera can help heal, as can some herbs. Also herbs can be useful for making a bland meal really tasty.

–       Create other streams of income. If you have only one source of income and lose it, you will find it very hard If you can create a couple of streams of income, if you lose one you will still have money coming in.

–       Change your mindset. Don’t look at everything and think you want it, or deserve it. Instead look at your needs, be grateful for what you have and learn to save for your desires instead of splurging. Being frugal is a form of independence, because you are less dependent on money, less dependent on the demands from society and not engulfed in a consumerism mentality.

What are your thoughts? How are you or how have you prepared?

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2 thoughts on “How to prepare for a recession

  1. Good list! I think changing your mindset is a really big one, and I think it’s probably what I’d say my husband and I have done the best at recently. We’re newly married and just moved across the country, our finances are definitely not where we want them to be but changing our mindset about what we need versus what we want – and even what we want versus what we REALLY want – is helping us move in the right direction to be prepared for whatever comes our way.

  2. great ideas and listing. I love it. I hope I would apply it and can help me changing my lifestyle. thanks for this wonderful and very useful post.

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