As we watch, read or listen to the news, most experts agree a recession is here. Most predict the recession will last at least thru 2023. As we talk to neighbors and friends, we hear how they have changed their eating and purchasing habits to keep up with rising prices due to inflation. As we all evaluated our own finances, we have been faced with difficult choices already. Now we face the added challenge of a recession.
Unemployment typically rises during a recession as businesses cut back or shut down, but the degree of disruption can vary. We are already seeing layoffs and downsizing. This has not yet been dramatic as millions of jobs have gone unfilled during and since the pandemic. This will change as government checks dry up. However, many of those unfilled jobs will no longer be available as businesses do what families have been forced to do and tighten their belts. Some companies have already begun downsizing, you may recognize a few, there are many more.
Cisco layoffs: 5% of workforce
Goldman Sachs layoffs: 8% of workforce and cancels promotions
DoorDash layoffs: 6% of workforce
Amazon layoffs: 1% of workforce and 3% of management
Meta (Facebook) layoffs: 13% of workforce for total of 11,000 jobs
Twitter layoffs: 50% of workforce
Zillow layoffs: 5% of workforce
Snapchat layoffs: 20% of workforce
Peloton layoffs: 20% of workforce
Disney hiring freeze, limiting travel, layoffs accounted but not the numbers
If we prepare for just four scenarios, we can be prepared for almost all emergencies whether they be medical, financial or major disasters. One of those areas to prepare for is a job loss. We will concentrate on job loss this week and you will better understand how preparing for a job loss also prepares us for a recession.
Consider, if you are prepared to lose a job, you will have resources in place to survive a disaster, pay for unexpected medical expenses, feed and house your family when store shelves are empty due to strikes, drought, or supply chain issues. Preparing for a job loss prepares us to deal with many challenges including a recession even when your job is secure.
What would you be doing now if you thought you might lose your income stream?
I was recently asked if we should be buying gold and silver in preparation for a deeper recession. Is this something you would do to prepare for a job loss? I believe having gold and silver is not a bad thing, but should be looked at more as a long-term retirement investment than an investment for economic downturn or job loss. I would remind you I am not a financial planner and have no degree in economics so my thoughts are based solely on what I have learned as I have studied the fate of other countries.
My priority has always been and will continue to be stocking a General Store in our own home. You will be prepared with food, hygiene supplies, yes TP, medications and more as you build your store. If you check your supplies and notice you have few over the counter medications on your shelves, now is the time to stock up. The supply chain is still unreliable, and the cost of trucking is about to go up due to limited supplies of diesel fuel. It may surprise you to know only 13% of our medications are made here in the United States. Medical supplies are already in short supply. Speaking of increases in fuel prices, remember farming relies on diesel for tractors and other equipment. Yes, food and medication costs will continue to rise as job losses increase.
Also concentrate on items such as mylar emergency blankets that can be used in so many ways to save money. The same applies to glow sticks, coffee filters, candles and other items that can be used in unusual ways. See your Totally Ready Emergency binders for multiple uses for these and other items that are inexpensive or that you already own. During a financially difficult time knowing how to use common items to solve problems will be a huge help and comfort.
Second: build skills. Learn to garden and store seeds, in the fridge. Seeds are cheap and are good for two seasons if stored in the cold. Your local county extension service can provide you with information and tips. Even a few five-gallon bucket with veggies can help provide fresh produce when the budget is tight. If you have lost a job, selling extra produce can help with needed cash for paying bills.
Learn to preserve foods. Learn to can, dehydrate and freeze foods you produce or get cheap or for free. You will need a dehydrator or access to one or screens to dry foods in the sun. You will need freezer bags and/or a vacuum sealer to freeze produce. Begin to practice these skills and research who in your group of family and friends may have the equipment needed to preserve food. You may be surprised how many people will just give you canning jars. Again, your homemade pickles or salsas made from your garden, can be a source of income. Learn now to be prepared for later.
Third: Plant fruit trees and bushes, if you can do so, for a supply of free food you can use and barter with. Again, consult a nursey or county extension office to determine what will thrive in your area. Just because a grocery store or big box store sells something does not mean it will grow well in your area. Strawberries can grow almost anywhere in the ground, in pots and even hanging baskets and they can be frozen, and canned as syrup and jam.
Fourth: Prepare for power outages by storing fuel for cooking, getting cooking supplies such as barbecue tools and heat proof gloves, aluminum foil, and matches. It may not be an outage that has you looking for ways to save money. You may choose to turn down the heat to save limited funds. Mylar blankets during the winter will keep out drafts from windows and doors and keep rooms warmer. Glow sticks and flashlights and batteries for light, paint can heaters, you get the idea, all can be used when conserving power. In all the economic downturns I have studied power became a problem either because it shut down or people could not pay their bills and were forced to lower the thermometer.
Fifth: Pay off debts now. Pay off all credit cards, pay down your mortgage, pay off or get a cheaper car. Paying down a mortgage now builds which will then be available to borrow later if the worst happens and you have no other options. Paying off credit card and other debt always comes first, then the mortgage.
Debt will destroy your credit score when you are late or fail to make a payment making a recovery from a job loss or a recession much harder. From now on, pay with cash. Take a serious look at ways you can save to pay off debt or ways to earn extra now to be used exclusively to pay off debt.
Six: Build a reserve. This may seem impossible as you are trying to pay down debt but be creative. Have a garage sale with all proceeds going into a savings account you will not touch, not now and not until it is needed to pay housing costs, or food once your food storage has all been eaten. Three to six months of expenses should be your goal.
Seven: Take care of medical needs and tests now. If you lose your job, you will likely lose your medical insurance. When was your last visit to the dentist? Are your children’s visits to the doctor and their vaccinations all up to date? The hope is you will not lose your income but preparing as though you will have the added benefit of keeping your family healthy.
Eighth: Be the standout now. Maybe this should have been number two after food storage. Employers are frustrated as they have seen a big change in employees since the pandemic. Workers are no longer willing to accept overtime. They leave right at 5 or even duck out early. They are less willing to work on new projects. Before layoffs begin, be the one an employer does not want to be without.
Never hesitate to ask for help. Friends and family have skills they will be happy to teach you. It feels so good when someone thinks enough of you to ask for help. Share your goals. It may just be the example others need to get started preparing themselves and you will have created a buddy you can share ideas and resources with. Ask for cash or gift cards for birthdays and other occasions and use these to stock up, pay off debit or build a reserve. I’d love to help, check out the Totally Ready blog and Facebook page for money saving tips every Wednesday, share your ideas and ask questions. Working together we can all be self-reliant during hard times.