This site contains affiliate links. As an Amazon Associate, I earn a commission from qualifying purchases at no extra cost to you. Full Disclosure Here.
The possibility of a global economic downturn catches the headlines, but it’s far from the only financial SHTF situation you should be prepping for. In fact, if you’re not ready for a personal financial emergency, or a downturn in your industry, I’m not sure how you could be prepared for a global economic downturn. In this article, we will cover each level of financial collapse and talk about strategies that you can use to prepare yourself and survive them.
Personal Financial Collapse
As far as SHTF scenarios go, the personal financial collapse has to be among the most common. Job loss, injury or illness that keeps you from working, even simpler emergencies like dental work can send you into crisis mode.
Less than half of Americans could cover a thousand dollar emergency with their savings. Instead, most will tap into their credit card, personal loans, borrow from friends, or a take a serious dip into their discretionary spending to try to cover the gap. If that’s you, how do you start to prepare?
Well, your financial circumstances are very personal to you. If I suggested you build an emergency fund, pay down your debt, or spend less, you might say “yeah of course. But how?” Consulting with a financial adviser is a good start. Many banks, credit unions, and other financial institutions offer advice for free, so you should look into whether yours does the same.
Plus, there are many popular financial books, including many that have made the rounds in the homesteading space, that will be of special interest to preppers.
- The Total Money Makeover by Dave Ramsey
If you don’t have a plan to get out of debt, don’t have a budget you can actually live by, or have no idea how to start investing, Ramsey has a plan for you.
- Your Money or Your Life: 9 Steps to Transforming Your Relationship with Money and Achieving Financial Independence by Vicki Robin and Joe Dominguez
This is the second most suggested book for personal finance and covers essentially the same problems as Ramsey, just provides different solutions. The real strength of this strategy is a budget overhaul.
- The Money Book for the Young, Fabulous & Broke by Suze Orman
It’s a lot easier to make financial mistakes when you’re young and inexperienced. Orman seeks to give those in their twenties and thirties the wisdom most of us learn the hard way.
- Get a Financial Life by Beth Kobliner
This book is also aimed more at younger people, and therefore it mostly covers basic information. Still, it’s very practical and many of us need to dispel myths about the basics of finances.
With the pace of change in our economy, chances are your industry will either struggle in the face of new change or die altogether. Long gone are the days where we can rely on working at one company, or in one industry, for our whole lives. Instead, you need to prepare for the possibility that your industry will suffer, and it’s best to do that if it is still healthy. That way, you’ll have a plan in place when things slow down or stop.
Here are a few ways you can prep for industry-wide collapse:
- Update your resume yearly: Your first step in a dying industry might be to move to the company that is dealing with the change the best, buying yourself time to make another move. If your resume is ready, you can jump immediately when a chance to move comes up.
- Consider lateral moves: Your industry may be dying, but your skills may be transferable. Understanding your other career options before you have to start looking for jobs in them will allow you to identify ways you can bolster your chances in those industries. Need a new education?
- Have a healthy side-gig: Selling your jams or printing t-shirts on the side can give you stability while you change careers. If you start your side gig well before your industry sours, you may find that it can even become your career.
- Create passive income: Perhaps better than a side-gig, setting up passive income streams provide great stability. If you’re doing well and could create passive income, it’s certainly something to look into.
- Know your education options: Are there any good retraining options you could pursue? You may be surprised about what kind of careers are now out there, and how quickly you could gain the education and skills to get those careers.
- Craft your story: You never want to be motivated by desperation—prepping is all about avoiding that. Still, if you’ve become desperate, that’s not what you want to tell new employers. Julian Youngblood, writing for the Muse, made sure she spun her move to a new industry in a positive light.
“Messaging here is key. Even if you’re thinking, ‘I’m afraid my job will disappear, and I need to get ahead of it,’ it’s important to find an active and positive way to characterize your move. Talk about why you want to transition to a particular industry, not just any other industry.”
Taking the time now to see your options and understand what else motivates you can help you craft this story later when you need it.
Is your industry already dying? According to USA Today, at least 24 industries are dying in America, including news and media, office supplies, curtain and linen mills, other clothing industries, port and harbor operations, photofinishing, magnetic media manufacturing, and more. Even if you’re not in one of these, it might be time to look into the health of your industry.
Gaye has spoken a lot about how to deal with financial recessions and depressions when they come along. Most of her advice is about learning how to fulfill your own needs without buying things and reduce your monthly bills however you can. There are many ways you can do that, from growing food, making clothing, choosing no-cost entertainment, using solar ovens, reducing the water you use, and much more.
Most of our articles here at Backdoor Survival will be somewhat useful for this purpose, so where do you start? With the necessities.
- Learn how to grow your own food, especially the staples and potatoes in particular
- Learn how to filter, catch and store water
- Try a solar oven for no-cost cooking
- Use no-cost methods to reduce your anxiety or depression
- If you’re in a cold area, learn how you’d heat your home if you couldn’t pay the energy bill
These articles from the archives that focus on depressions specifically are quite helpful:
- Depression Cooking: A Visit to Clara’s Kitchen
- 12 Frugal Lessons from the Great Depression
- 16 Reasons Why A Second Great Depression Will be Different
It’s also worth noting that, in preparation for an economic crisis, especially hyperinflation, many people turn to buying and hiding precious metals. We have a guide on buying silver and a guide on physically hiding your money that will both be helpful in your recession prep.
Global Financial Depression
You can prepare for a global financial depression much the same way you prepare for a national recession, however, you can expect it to be worse. A global financial depression would likely bring some political instability, and you’d likely have fewer resources. Defending yourself and scrounging become bigger concerns in a global SHTF event.
For safety and self-defense strategies, check out:
- Best perimeter fences
- Fences that can keep people out
- The “Prepper’s Armed Defense”
- Non-lethal weapons
- Pepper spray options
- More home security tips
It’s also useful to expand your food repertoire in global financial crises, so check out how to:
- Trap animals
- Cook with or use the whole carcass
- Forage mushrooms, dandelions,
- Find a foraging book for your area
- Eat insects
- Cook with the food you’ve stockpiled
You can’t prepare for everything, so you may find yourself missing key items if the stores are out due to a financial crisis. If so, you can always barter for survival, if you’ve stockpiled desirable items beforehand.
It’s a troubling thought, but if you lose your home in a serious financial crisis, you may end up living in your car. We have a guide on how to make living in your car more comfortable and safe.
Don’t let yourself get caught up with preparing for wilder SHTF events if you’re not ready for a personal financial crisis. An emergency fund will carry you through the most common crisis that life will throw at you. It will also provide you with peace of mind. How else do you prepare for financial difficulty, whether personal or global?
Author Bio: Ellysa Chenery can be found writing all over the web. She loves adapting traditional skills for new situations, whether in the wilderness, garden, or homestead. Her favorite smell is carrots fresh from the dirt.