How should people prepare for the difficult years that are coming? I get asked about that a lot. Once people really examine the facts, it is not too hard to convince them that an economic collapse is coming. But once they accept that reality, most of them want to know what they can do to prepare themselves and their families for the hard times that are ahead. Well, the truth is that it does not have to be complicated. Many of the things discussed throughout this article are things that most of us should be doing anyway. Now is not the time to be splurging on luxuries or expensive vacations. Now is not the time to be going into large amounts of debt. Instead, we all need to get back to the basics and we all need to do what we can to become more independent of the system. Just remember what happened back in 2008. Millions of Americans lost their jobs and millions of Americans lost their homes. Now experts all over the globe are warning that another great financial crisis that could be just as bad as 2008 (or even worse) is coming. Those that don't take the time to prepare this time are not going to have any excuse.
But there is also a lot of sensationalism out there. There are some people out there that claim that the economy is going to collapse all at once and that we are going to go from where we are now to some type of a post-apocalyptic "Mad Max" society almost overnight.
Well, that is just not going to happen. We are not going to wake up next week in a world where we are all fighting each other with sharp pointed sticks.
Just like anything else, an economic collapse takes time. I like to describe what is happening using an analogy from the beach. When you build a mighty sand castle, it is not totally destroyed by the first wave that comes along, right?
Well, it is the same thing with the U.S. economy. It was the greatest economic machine that the world has ever seen, and it is most definitely in decline. But there are stages to that decline.
The "wave" that came along in 2008 did a huge amount of damage. Our economy has not recovered from that.
Now another wave is coming. But that will not be the end. There will be other waves after that.
Eventually, this thing is coming all the way down. Someday America will be such a horror show that it will be hard to believe that it is the same place that many of us grew up in.
But in the short-term, we are going to be facing a major league recession and millions of Americans will lose their jobs. It won't be the end of the world, but for some people it may feel like it.
So when you are talking about "how to prepare", the truth is that it depends on what kind of time frame you are talking about.
In the long-term, a lot of the things that even the hardcore survivalists are doing will not be nearly enough.
In the short-term, there are things that all of us can do to weather the coming storm....
Get Out Of Debt
The global financial system is headed for a massive crisis. Just like in 2008, a lot of people are going to lose their jobs and a lot of people are going to lose their homes.
In such an environment, it makes sense to travel as "lightly" as possible.
That means getting rid of debt.
Some forms of debt are worse than others. Mortgage debt is not that bad. We all need somewhere to live, and not all of us can run out and immediately pay off our mortgages.
But there are other forms of debt that are absolutely toxic. A good example of this is credit card debt. There are very few things that are as good at bleeding your finances as credit card debt is. For example, according to the credit card repayment calculator, if you have a $6000 balance on a credit card with a 20 percent interest rate and only pay the minimum payment each time, it will take you 54 years to pay off that credit card.
During those 54 years you will pay $26,168 in interest rate charges on that credit card balance in addition to the $6000 in principal that you are required to pay back. That is before any fees or penalties are even calculated.
But a lot of Americans still have not learned to stay away from credit card debt. In fact, one out of every seven Americans has at least 10 credit cards.
Ouch.
The truth is that in future years there is a good chance that you may be facing a situation where you are not making as much income, so you want to try to start reducing your expenses right now. Getting out of debt will help you to do this.
Save Money
A shockingly high number of American families are operating without any kind of financial cushion whatsoever....
-According to a Harris Interactive survey taken in 2010, 77 percent of all Americans are living paycheck to paycheck.
-According to one recent survey, one out of every three Americans would not be able to make a mortgage or rent payment next month if they suddenly lost their current job.
This is one reason why so many Americans have lost their homes and why so many Americans have fallen below the poverty level in recent years. They simply had no cushion.
Last year, 2.6 million more Americans dropped into poverty. That was the largest increase that we have seen since the U.S. government began keeping statistics on this back in 1959.
Don't let this happen to you. At a minimum, everyone out there should have a cushion that will cover at least 6 months worth of expenses. Preferably, you should have a cushion that will last you at least a year.
Yes, I know that is a tall order. But you would be amazed at how much money the average American family wastes in a typical month. Almost all of us have areas where we can cut back.
Trust me, in the middle of a major recession you will be really glad that you are sitting on a pile of savings.
Get Independent Of The System
What would you do if you lost your job tomorrow?
Would you have any other income?
How long would it be before you lost your home?
Those are very important questions.
The truth is that the system is failing and so we all need to work hard to become more independent of the system.
So what does that mean?
Well, instead of relying on someone else to employ you indefinitely, you can start up a business in your spare time. Yes, it will cut into your television time, but if someday you lose your job you will be extremely happy that you still have some income coming in.
Another way of becoming more independent is to start a garden.
Yes, you can run down the street and buy giant piles of cheap food right now, but that will not be the case forever.
Store Food And Focus On The Essentials
I might get into a little trouble for saying this, but the truth is that there is not going to be a major famine in America in 2012.
However, that does not mean that you should not be storing food and other essentials.
In the old days, our grandparents always saved up food. It was just a natural thing for them to do. This was especially the case if they lived through the Great Depression.
When hard times come, you will be glad that you have food stored up. Plus, food is never going to be cheaper than it is today. Having food stored up is a great hedge against the rising food prices that we will see in the future.
No, we are not going to see hyperinflation by the end of the year like many of the sensationalists are warning. But someday you will be really glad that you stored up food for yourself and your family.
We live in a world that is becoming more unstable with each passing month. You never know when the next natural disaster, pandemic, war or national emergency will strike.
It only makes sense to store food and other basic essentials that you will need in the future.
In a previous article entitled "20 Things You Will Need To Survive When The Economy Collapses And The Next Great Depression Begins", I listed 20 of the things that you would need in the event of a major disaster, a national emergency or a total economic collapse. These are things that you are going to want to make sure that you have ready right now, because after the crisis begins it may be too late to prepare....
#1) Storable Food
#2) Clean Water
#3) Shelter
#4) Warm Clothing
#5) An Axe
#6) Lighters Or Matches
#7) Hiking Boots Or Comfortable Shoes
#8) A Flashlight And/Or Lantern
#9) A Radio
#10) Communication Equipment
#11) A Swiss Army Knife
#12) Personal Hygiene Items
#13) A First Aid Kit And Other Medical Supplies
#14) Extra Gasoline (But Be Very Careful How You Store It)
#15) A Sewing Kit
#16) Self-Defense Equipment
#17) A Compass
#18) A Hiking Backpack
#19) A Community
#20) A Backup Plan
In the comments to that article, the readers suggested the following additional items....
A K-Bar Fighting Knife
Salt
Extra Batteries
Medicine
A Camp Stove
Propane
Pet Food
Heirloom Seeds
Tools
An LED Headlamp
Candles
Clorox
Calcium Hypochlorite
Ziplock Bags
Maps Of Your Area
Binoculars
Sleeping Bags
Rifle For Hunting
Extra Socks
Gloves
Gold And Silver Coins For Bartering
Once again, a lot of these things are not going to be needed right away. The economy is going to go through a lot more ups and downs before it totally dies.
In the short-term, keep an eye on the European debt crisis, the Japanese debt crisis and the U.S. debt crisis. There are a lot of similarities between what happened back in 2008 and what is happening now.
And what happened following the crisis of 2008?
Unemployment shot through the roof.
So be prepared for that.
Make a plan for how you and your family will survive if you end up unemployed.
Also, when it comes to "how to prepare", there is one aspect that is often overlooked.
During the difficult years ahead, we are all going to have to be mentally and spiritually tough.
It won't matter how good your physical and financial preparations are if you are cowardly and paralyzed by fear.
The times that are coming are going to test all of our hearts.
Some people are going to make it and some people aren't.
Some people will become so consumed with fear that they will give up completely.
Don't let that happen to you.
Prepare your heart, soul, mind and body right now for what is coming. For those that are cowardly the years ahead will be a total nightmare, but for those that overcome the fear the years ahead have the potential to be a great adventure.
I have read so many blogs that say pay off your debts. For the life of me I cannot figure out why. If your debts are personal, of course pay them off. If your debts are to banks, why pay them off? Use your credit to prep. Get a jump on it. When the SHTF who will the banks send to collect? Not my local sherrif, he has said that they may subbmit their request in triplicate and if and when he has time he will serve their papers.
And so they have judgements? how can they collect? After SHTF collectors and lawyers are not going to be all that popular. My advise is to take care of your family and friends and let Goldman Sachs, Citicorp, B of A, and JP Morgan just come to collect the money that they have debaised through their control of the Federal reserve system. Repay them with a good solid commidity, Pb. They can run, but not hide. we will find them and extract justice. It will not stop the suffering, but it will ensure that they never again inflict this on us.
Be true in all your dealings with peoople.
+1. Your money is loaned to you at interest. Backed by nothing more than a name. Federal Reserve.
Why **************** would anyone continue to play this game of Monopoly is beyond me.
Guys you ignore one thing, that the collapse will not happen in one night, or one week or one month.
The people who will come to collect, to take away everything that you have prepped will be those that are not affected yet, those propped up by the governments and the banks. They will forcibly come and take everything that you spent their money to build up to prepare. Then your preparation will all be useless as it will be gone. The banks and governments will be the last to go, and they will take your preparations.
Its like the old story of the ant and the grasshopper, where the ant stored up food but the grasshopper didn’t bother. Then when winter came the grasshopper went hungry and the ants had what they needed. But what you are suggesting is get all your food for the winter from the grasshopper, and thinking that the grasshopper won’t come collect on what you owe him.
that’s why you hide your provisions.
If the grasshopper is going to collect then he is going to have to try and collect from everyone, and the needs of the many outweigh the needs of the few, see? The grasshopper wont survive against such a grand scale of ants.
True to that. Thanks for saying so.
1 Corinthians 16:2
On the first day of every week each one of you is to put aside and save, as he may prosper, so that no collections be made when I come.
Aside from that also because this collapse isn’t going to be over night you still have approx two years left (by my own best guesses) it is just a good idea to get your finacial house in order first. I set aside %20 of my paycheck before I pay bills and I still live comfortably get rid if your tv first (cable or sat) keep the dvds and vhs stop eating out five or six times a week make your own food (healthier anyways) and cheaper. Plus its just a good exercise to save money and not spend it as soon as you get it just to see how big of a wad you can save. When I go buy supplies I charge myself a %20 withdrawal fee for every week that money is out of my pot even more motivation to pay it back sooner. Practice telling your kids no everytime they see something shiny or new take then for a walk instead its free
Wakey, wakey people….Anyone with his/her head in the sand will be up for Darwinian deselection and at the front of the line. The issues are MUCH higher up than any president or party will ever be. The political game is MEANT to keep us blind to facts.
Wasting time arguing about who the worst president is, is just what they want. They’re paid puppets with no remorse, and they all subscribe to the idea that growth is forever. The answers lie not amongst the choices within the box….we must question the very box itself. It’s crumbling, and politics today is just the last gasp of trying to hang on to a dying dinosaur at the moment of the death rattle. Again, wake up and smell yourselves, people. Come on.
This is Gold Leader standing by.
excellent response….so many of the masses are consumed with which horse will win the race. Little do they know that all the horses are owned by the same group… Presidents are selected, Not elected.
If you do not pay your debts to big corps, it would stand to reason we’d see a rise in private thugs (alla Pinkertons) that would be sent to enforce outstanding debt and protect their interests…
I have to laugh when I read over and over in the comments that “you can run but you can’t hide”, when talking about the controllers. What can “we” do about it? Nothing. The simple cause of this whole charade is the Fiat money system controlled by private bankers in ownership of the Federal Reserve and it’s foreign counterparts. All else is a game. “We” don’t get it, and subsequently can do noting about it. Get a share while you can, because you won’t get another chance in this go around.
so your advice is to be a wussy and cower and roll up and cover up like a betch? so “laugh” if u want to, coward! Ignore Tom… Uncle Tom that is :/
PINKERTONS, SAME AS BLACKWATER.?
The problem is, we never know exactly when or where this will all start that is why the rule of thumb I always follow is simple: If you venture out, even for a short trip, ALWAYS take a backpack with first aid and emergency supplies.
That’s why I started buying and selling long term food, good for 25+ years. Its always in our venture packs along with the usual emergency essentials.
So does starting an online based business makes sense? If things are going to get so bad how will starting a business and not relying on a job help? You still have to get paid by CC companies and banks from your customers in a online marketplace.
i think the point (that your missing btw) is to get back to DIY and thinking more entrepreneurially. small businesses vs. the 1% being something we-the-people can do today! shop local, shop small.
Learn something useful. Learn to repair & build things, learn to sew/quilt,learn gardening, learn to skin animals and prepare hides, learn leatherworking, pottery, herbal medicine, dowsing.
Begin raising chickens, rabbits or goats.
Believe it or not, these are practical suggestions.
Thank you, BarelySenior! I think this is some of the most wise advice. People with essential primitive skills will likely have a greater chance of survival, and maybe even a level of comfort and calm that others will miss.
Now its our time to start living in a different style, with much more care about how spend every single coin or every single dolar, so we will know we can do it and we can live happily…..even those crisis time.
and think one thing people need to be prepared for is that, with all the talk about solar storms, the power grid is going to go out. it is inevitable we are in a cycle with our sun and the most intelligent minds are telling us that this is a fact. Alot of people dont think about our jails. every single cell in our jails are electronically locked. once the power grid goes out all of these convicts are going to be on the lose. and then the economic collapse will happen and it will be a bad mix. just be prepared everyone.
This all makes sense. Collapse won’t happen over night, it will be in waves. You’d better bet once the first wave hits (jobs deminish, inflation rises) Credit companies will be wanting to pull in ALL outstanding debt, especially debt in default. Someone will be knocking on the door & eventually seizing assets. Wonder why so many people went homeless during the Great Depression….Banks, County Clerks, Tax Agents did in fact come, seize assets and serve evictions.
Own everything you can 100% outright. Minimize debt. So you can generate enough income to keep the house payment current & purchasae living essentials even with a catastrophic income loss. The idea is to pare down expenses to the barest of essentials on a regular basis, not live like Grizzly Adams. You won’t need to.
Learn how to fix things, lots of things. In our society the “Mr. Fix It” or “Tinker” is a long, long lost art. I don’t know of many people who can fix anything….your services will be in high demand.
Join with neighbors and plant Victory Gardens with Heirloom seeds. then at harvest time learn how to can those veggies. People wonder. Why Heirloom seeds? Because Heirloom seeds aren’t as prone to blight as commercial seeds, don’t require special pesticides and have proven over time their ability to survive & propogate. Be sure to “hold back” 10%-20% of the seeds for next year’s replanting. Potatoes, Beans, Carrots, Tomatos, Turnips, Herbs, Berries, Beets and any easily canned or dried varieties of vegitation.
Laern how to cook. Not opening a box of mix or frozen dinner but actual cooking from scratch. With that keep a decent supply of basic staples. Flour, eggs, salt, sugar, oils, shortening, canned goods, dried meats, etc. In reality cooking from scratch is just as easy as preparing processed foods, takes about 30 minutes to an hour longer is much less expensive and a lot healthier.
Agreed on having a useful firearm or several and ammunition. By useful I mean a utilitarian weapon for hunting and protection of property & self. A decent pump shotgun is the most useful and a decent sidearm being a six shot revolver. A Mac-10 or an Uzi is pretty much useless in most cases as are semi-automatic hand guns due to their propensity to jam & break. With that said, don’t expect to be living in a Post Apocolyptic World. It won’t be madness, mayhem and roving pillaging gangs or armies of derelicts. Just a sharp rise in crime, mostly theft & burglary for people to survive.
Hand tools are a Must Have. Shovels, Spades, a good Axe, Post hole digger, spud bar, rakes, hoes, sledge hammer and small mechanical hand tools (wrench set, screw drivers, etc.). When stuff breaks you’re going to need to fix it….or call me to come fix it.
Trust me on these things. I was amid the fallout in ’08 and these are things I had done or wished I had done in order to get through it. Learning how to live CHEAP is the most important thing. Thankfully, hard learned lessons from the recession have us better prepared for if/when it happens again.
i don’t think getting out of debt matters tooo much. a little bit of debt is ok, maybe even good, if you are able to repay. <—-(live above means, before you have the money). in a real financial crisis, inflation will probably be tremendous, meaning the money you once had, might be equivalent to a months pay. MUCH MORE IMPORTANT to be prepared with resources, skills, land, and defense. the rest is just funny money
I agree with Andrew on not spending too much money to aggressively pay down debt right now. Not to say people shouldn’t be paying their minimum bills, but… It might be a better idea to secure the survival items listed above and acquiring some “fix it” skills as Jay suggests.
How we have not come together & taken the establishment over. Kick these babboons out of office. Imprison Jp morgan, B of A, etc…
This can end today. As soon as we realize we are millions larger than the corperations that run the government.
This is my Country! Not BofA or Jp **************** etc…
Another preparation that many are over looking, but will probably prove quite useful for border states–or really any state for that matter: learn Spanish. If things burn down to trading and hunter/scavenger levels, it would behoove you to be able to communicate easily with anyone. And especially when many of our “handy man” jobs and farming chores are given to immigrants now-a-days. Just a thought.
I have a problem with all this. What are banks going to do? Reposess everyones house. That ought to get them a lot of money. No one will be able to buy what they repo, so it would be wiser to get what they can. A little bit is better than none. Don’t worry about cable, there probably won’t be any if no one can afford it. This type of thing will continue on to other businesses. That’s why it will eventually be a collapse.
my dad, a 65 year old, has said to me multiple times the only way to get ourselves out of this situation is to start shooting the politician one by one. Now he might be taking this to an extreme, but I don’t understand why we have allowed the government to continue the way it does and take away our freedoms without even a fuss!! Look up Jon Stewart Arrested Development and one way train to Gitmo. These explain exactly what our government is doing behind closed doors and under the radar. If you haven’t heard of it, you will be shocked by the laws our governments pass without our knowledge!