We are usually so quick to prepare for such things as natural disasters that we often forget about how we can ensure that our family survives through rough economic times. Economic collapse is a real threat and nobody is completely sure how it will unfold. The one thing that is sure however, is that very few people will be prepared when it does happen.
Even small steps matter. Those that make even small preparations will fare much better during an economic collapse than those who don’t make any at all. All it takes is a little common sense and you will see that the possibility of a collapse is likely.
The issue is that a lot of people don’t actually understand what an economic collapse is, and if they don’t know what it is then they don’t know how to prepare for it.
What is an Economic Collapse?
A collapse of the economy could manifest in many different forms, and be caused by a variety of events. Generally, we would see a significant downturn that could last for quite some time. Poverty would be rampant, which could lead to significant social unrest. This downturn could range anywhere from a big, deep recession to a complete collapse, which would end daily life as we know it. This is highly unlikely; however, you should make preparations anyway.
Three examples as to how a collapse could happen are:
- Cyber Attack – an attack that paralyzes or severely damages the Internet could have a devastating effect on commerce, banking, transportation, and anything that relies on the Web to run.
- Rapid Devaluation – a rapid devaluation of a country’s currency could drive the cost of goods sky high along with interest rates. Hyperinflation is a significant threat to the health of the economy.
- Terrorism – a terrorist attack of large magnitude, say a rogue country setting off an EMP (electromagnetic pulse) that cripples the power grid and creates significant chaos. Without power, things could deteriorate very rapidly. Access to the basics of clean water and food for many people could be severely impacted.
Start an Emergency Fund
I have written about the importance of starting an emergency fund before. During a collapse, a huge amount of jobs will be lost so you must have the funds available to handle unemployment during these times. Without these funds you could end up not only losing your job, but losing everything.
Start small but try to build up enough funds to cover a 6 month period. Whilst building your emergency fund, consider stockpiling items that could be used for bartering such as gold and silver, coffee, and tobacco.
During a collapse it could become difficult to gain access to your funds so it is advisable to always have the money on hand. You can view our previous guide that will give you some ideas as to where you can hide your money around the home.
Multiple Streams of Income
You need to start thinking about how you can generate excess income. This will depend on circumstances and your own skills but as an example you could start a business on the side, either physical or online. If a collapse becomes a reality, this could help close the gap on meeting your expenses and Surviving economically as it won’t be easy to get another well-paid job.
During a collapse there are things that people are going to need and you can use that to your advantage. Think in terms of the absence of critical items and services, such as clean water, food, medical supplies, and clothing.
Now, this will be tough but if you are in debt, you need to start looking at trying to become debt-free or at least reduce the amount of debt. I am working on a more in depth guide for getting out of debt as I feel it is incredibly important.
If you get laid off then having less to pay out each month is going to be a big help. This involves creating a budget that funnels as much as possible towards your debts. As an example, if you are paying subscriptions that you just don’t need, cancel them and put the money towards paying off your debt.
There are many methods online as to ways that people found easiest when it came to paying off their debts but you could list everybody that you owe money to and then start by paying the lowest balance first, then the next one and so on. As you finish paying off a debt it gives you encouragement to pay off the next and extra money to do so.
The last thing we want to look at is to make sure that we have a stockpile of the items that we would need to help us through until things get back to normal. During a collapse it is a real possibility that your access to water and electricity may be limited, if not cut off for a length time.
Water is your top priority so you should store as much as you possibly can for these times. Along with this, you need to get some way of purification such as filters and keep them with your supplies. It is recommended that you store a minimum of a gallon of water per day, per person. If you have pets, don’t forget to include enough for them too.
Along with this, we need to have a stockpile of nutritious, non-perishable food with a long shelf-life. Only store those foods that you and your family eat. Try to keep away from any processed foods and snacks, which usually have a short shelf-life. If anybody in the family requires a specific diet such as babies and those with diabetes, don’t forget to take this into consideration too.
What could you add to this post? Let us know in the comments below.