Author’s note: Just a thought but what are you doing while you watch General Conference? I often do what my friend calls a couch craft. Why not make Christmas ornaments for survivors of disasters. Check it out at: Operation Christmas Ornaments.

Emergency Preparedness is really a terrible term to use for what we are trying to accomplish together. It is not just emergencies that require our preparation but all the potholes as well as the sink holes we encounter along life’s journey. Now more than ever in the past few decades we are faced with new potholes every day and we know those sinkholes will also come. We are striving to become self-reliant, to care for our own needs. What peace it brings to know you can handle not just natural disasters but all the challenges ahead.

“No true Latter-day Saint, while physically or emotionally able, will voluntarily shift the burden of his own or his family’s well-being to someone else. So long as he can, under the inspiration of the Lord and with his own labors, he will work to the extent of his ability to supply himself and his family with the spiritual and temporal necessities of life.” (See Gen. 3:19, 1 Tim. 5:8, and Philip. 2:12.)” (Spencer W. Kimball, in Conference Report, Apr. 1978, p. 120; or Ensign, May 1978, p. 79.)

We have focused on inflation for the past year and what we need to be doing to provide a hedge against rising prices. Now it’s time to look forward to preparations for a recession economists are now warning is coming. Some have warned this could happen as soon as this summer, others forecast a recession will arrive by early 2023.

Recessions generally come after a decline in confidence, a sense among businesses and consumers that times won’t be as good as they have been. Some leading indicators a recession has arrived are reduced hours worked, fewer new orders of capital and consumer goods, lower level of building permits, increased interest rates and for the last 50 years all recessions have been preceded by greatly increased fuel prices.

Fewer new orders of capital and consumer goods, we have seen an increase of 9.7% January 2021 to January 2022 in costs to manufactured and delivered goods. Producers are now saying they can no longer absorb those increases and prices on goods will increase. As prices increase, orders always decrease, first step on the way to a recession.

For the past several weeks, the average fuel price has increased nationally a penny a day, then war happened in Ukraine. Instead of a penny increase each day we immediately witnessed a 15 cent increase overnight and the next day another 10 cents and now we just don’t know. With dependence on foreign oil and natural gas experts fear gasoline prices could reach $5.00 per gallon by summer nationwide. In California this has already happened, prices are nearing $6.00 per gallon. Hawaii is not far behind with prices over $5.00. In November of 2020 the national average for gas was $2.02 per gallon by March 2021 the price had increased to $2.81 per gallon and today it is $4.29.

Recession is a world-wide concern not just one in the United States. Everyone should be aware and preparing to be self-reliant no matter where they live.

What happens in a recession?

  • Unemployment typically rises as businesses cut back or shut down, but the degree of disruption can vary.
  • People who still have jobs tend to spend less during recessions, saving more, worrying that they may become unemployed. Those who are already unemployed naturally cut back. If too many people reduce their spending, the recession can deepen. One person’s spending is another person’s income, and if too many people spend less even those employed suffer. What makes sense for an individual can harm the economy.
  • Manufacturing and services decline. With fewer people purchasing, needs for production declines and manufacturing is reduced as warehouses and retail outlets become over stocked.
  • A depression is a severe recession whose duration is usually measured in years rather than months. Depressions may also feature the breakdown of a key part of the economy, the financial system. Interest rates sore and there is less money circulating in the economy.

What can you do now to prepare for a recession?

  1. Increase your food and non-food storage efforts. I know you always hear that but during a period of inflation like the one we are experiencing now, prices rises dramatically. These prices do not immediately ease during a recession, in fact they may never go back to previous prices. We saw that during the last inflationary period. Peanut butter is an example most can relate to. During the last inflationary time prices rose and the size of the containers decreased at the same time. Peanut butter went from $1.25 to over $2.30 and it did not come back down during or after the recession.  Stock up now and you never have to pay full price again, you can wait for sales. The war in Ukraine is already taking a huge toll on worldwide food supplies. Purchase more food now and/or plan now to grow and preserve your own.
  2. Get out of debt. The Treasury has already raised interest rates twice this year. Rates will rise on new loans and on credit cards as we move forward. Pay off the highest interest debts you have now. If you have a variable interest rate loan pay it off or pay it down as quickly as possible before the payment goes up. Don’t forget student loans.
  3. Step up your savings efforts. If you pay into a savings account monthly, increase the amount you add each pay period. Recession means job losses. Could you be one who loses a job? It is not unusual for the most senior employees to be the ones fired during a recession, they make the most money. Remember the phrase last in first out? Those hired last and those making the biggest salaries will be the ones most likely to lose their jobs. Those in the construction industry are also at great risk as during a recession housing construction slows. Less orders, fewer employees needed in manufacturing positions in all industries.
  4. Create a second income stream. You may be thinking you do not have time for another job or that you do not have the expertise or talent to sell online. Get busy and think out of the box. Income is not all about cash. Can you sew, cut hair, take photos, cook, fix cars, teach? Could you barter those skills? If you have any of these skills, or many more, hone them now. If you sew, stock up on thread, needled, buttons and be prepared to alter clothing for less than the local pros and take on a few jobs now. If you are a great cook or baker begin now to develop recipes that could be delivered to those housebound and reliant on food delivery and begin deliveries now. You can do it better and less expensively. Birthday cakes are expensive from a bakery, even the grocery store bakery. Put your hobby to work and begin making a cake or two a week. Our grandson earned money making cinnamon rolls for delivery General Conference weekend.
  5. Work on your credit score. Check your score now and work to improve it. If you should lose a job or find your hours reduced, you may need to borrow money to pay bills. The lowest rates go to those with the best credit scores, after all, they are the ones most likely to pay their debts.
  6. Think housing. If you are a renter, start reducing expenses so you will have money saved to pay the rent if your income is interrupted or reduced.

    If you plan to buy a home this year or next, have realistic expectations about what you can afford and make sure you have a financial cushion to protect you. Know what you can afford now without the hope or expectation of a future raise in income.

    When you buy a home, a lender will want to see some money in savings even after you purchase the home, building confidence you can make payments. Also, save with the knowledge you will need repairs, all homes do.
  7. That nasty word…budget. Make sacrifices now and you may be able to not only stay current on bill paying but also take advantage of opportunities in the future. During a recession, you may find great deals on everything from furniture and autos to homes. We will be sharing ideas at on ways to sacrifice a little now. Join us there and help us by sharing your ideas for small sacrifices now to be prepared for whatever the future brings. Prioritize paying off debt and building savings.

    My number one budget suggestion, take the Church’s course, Personal Finances for Self-Reliance. I have facilitated this class twice and those who followed the plan gained spiritually and learned to manage their finances in a way they can continue. Talk to your bishop to find out more.

We have been warned by prophets these times would come. We have now also been warned by experts. You have been taught the warning signs of a recession. Are you seeing them? It is never too early to begin preparing for what may be. It is also never too late to begin. Whether you have been preparing for years or you are new to preparing now is the time to evaluate where you are. Do not run before you learn to walk. Ask for help, tackle one task at a time and then move forward and work on two at a time, then three.

“Decisions determine destiny” (Thomas S. Monson) What destiny are you choosing?

Join Carolyn at each week for help with food storage and all your self-reliance needs.