Sunday, May 22, 2022

Advice for a financial crisis

There has been a lot of chatter in the news lately about an impending financial crisis. Predictions for this economic downturn run the gamut from "mild" to "catastrophic." In response, I've seen a few articles on how best to weather such a crisis. Most of these advice pieces are "meh" (along the lines of "stop drinking so many lattés"-style of guidance). Others are downright insulting (such as this condescending piece of work on how to handle inflation if you make less than $300,000/year – which, by the way, is approximately 96% of Americans).

But once in a while I come across an article that has some meat to it, such as this one: 10 Things Not To Do When The Next Great Depression Strikes.

This piece focuses on Big Things. This list includes:

• Don't panic

• Don't quit your job

• Don't take your job for granted

• Don't buy anything on credit

• Don't become a cosigner on a loan

• Don't switch to an adjustable-rate mortgage

• Don't make investments that aren't secure

• Don't upgrade your lifestyle

• Don't keep your wealth in cash

• Don't defraud your creditors

(You can go to the article to read details for each of these bullet points.)

But even this advice, as meaty as it is, doesn't universally apply. Much of the advice assumes an upper middle-class lifestyle at best. Not everyone can afford a mortgage, adjustable rate or not. Not everyone has surplus money for "investments." Not everyone has "wealth," whether it's in cash or anything else.

So to this advice, I would add more. Consider:

• Diversify your income stream.

• Reduce your expenses.

• Try an all-cash lifestyle (where possible) to keep track of spending (some people prefer the "envelope" system whatever works)

• Reduce debt; or at the very least, try not to incur more.

• Cultivate (or pick up) side gigs; who knows these might develop into a decent income stream.

• Go frugal frugal frugal. Shop in thrift stores, buy in bulk, cook from scratch, etc. You know the routine.

Since the economy is on most peoples' minds these days, I thought it might be useful to solicit everyone's advice and experience. What advice would you give to weather a financial crisis, either personal or national?


  1. I am retired and on SS. My home is paid off, no car payment. I have a full pantry and freezers. I keep it full by buying on sale at the best prices I can find. You have listed all the things most of know to do. I will add take care of your health. Stay on your medications, keep up with your doctor appointments for physicals. Go to the doctor if you are sick or have a problem, bad back, stomach problems. Don't wait and have it turn into something serious. One hospitalization or surgery can wipe out your savings.

  2. I, also, am retired and was going to ask for advice directed toward those in my situation. Lo and behold, Texas has already commented on the very subject! Thanks, Tex, from a neighbor to your north (Oklahoma).

  3. It's well past mild already. I've lived through several recessions and bad economic times, but this feels like a storm is coming. Don't panic, but do all you can to ensure your family is secure in physical necessities. Food, shelter, water, and plans for how to cope if/when things get truly bad. Above all, keep your faith alive in your home and your heart. Be a good neighbor and friend. All things are for good.

  4. Don't let insurance on anything lapse.

  5. I’ve begun several hobbies: bees - for the Comoros dense honey and for the antibacterial properties of honey. Cost ZERO. I was given the hive. Picked up a few more on Craigslist and filled them with splits. Chickens: fresh eggs everyday. Cost: I itiallybought chicks for about three dollars each. Built a coop out of materials sourced on Craigslist all free. I did purchase four sheets of. Irrigated metal for roof to keep out any wild bird fecal contamination and thus prevent bird flu. Also have ongoing cost for feed which I supplement t with all food scraps and I grow squash and watermelons for them. Quail: ditto to the chicken costs. Garden: I’ve had so many frustrations with critters decimating my garden that last year a built a hoop house garden covered in metal screening. WOW. Should have done it long ago. Harvesting now and it is joyful to visit everyday. Haves stored some rice and beans and have dehydrated all fruit tree extras. Lastly you need neighbors you can trust or family members who you can accommodate for security. Thankfully I live in Silicon Valley (greatgrowi g climate) and bought property when is was more affordable to buy an old house o acreage vs. we model home so I have plenty of space. God Bless all of you and thank you Don and Patrice for sharing so many tips through the years.

    1. I have been thinking of making a hoop house covered in metal screen as well. Thanks for your comment regarding that.
      And I've been thinking about quail to add to chickens.
      My father told me years ago that during the great depression wildlife disappeared because most animals were hunted and eaten. He said it took a long time for them to come back, meaning reproductively. It's important to raise your food animals in addition to gardening .

  6. Do repairs now. Don't wait for things to get more expensive or scarce. If something (a valued piece of equipment, bad stairs, a bad tire) is shakey enough for you to doubt that it will get you through the next couple of years, fix it, NOW

  7. Get out of debt

  8. Don't wait until you are knee deep into a crisis to change your spending habits. Using your credit cards will only make your situation worse. Live within your means by cutting down on luxuries and saving the rest.

  9. I have learned through the years, all the don'ts are pretty good indicators to live normal life by, with the exception of not keeping your wealth in cash, gold, silver.
    In the long run keep your wealth in tangible assets or anything you can physically control, referred to as keeping your wealth in your pocket. When the entire economy goes South, what you have in your pocket is all you will have. Another good point would be to learn how to live like The Amish do.Their lifestyle has to many good points to list. And from what I understand they are branching out into parts of New York state from Pennsylvania, paying cash for unused/disused farms. Think about that.
    Without a pocketful of cash or barter materials, when the lectric goes out, and you know it will (happens every year somewhere) You Be Broke. Everyone will take cash, even if they publicly abhor cash.

  10. I think the biggest lesson - beyond trying to be out of debt - is simply the practice of learning to live simply if for no other reason that simple living usually means less outflow.

  11. I'm beginning to look for the balance between continuing to purchase necessities in case it all goes down and a slowdown/stopping other purchases. Priorities are shifting.

  12. Skills. Skills are important for your own household and as for barter.
    Manual backups. For every essential electric appliance or tool you have, ensure you have a manual backup. This includes kitchen, laundry, garden... make sure you can use them and they are in good shape -- now.
    Clothing. Think about putting aside --now-- extra socks, underwear, tee shirts, reading glasses, jeans/pants, gloves (work, garden, winter), slippers...while they are still available and somewhat affordable.

  13. I have found Under the Median to be the best source of everything we're going to need in the future. They air on Mondays and Wednesdays. They also have a Facebook page.

  14. The only other piece of advice I can offer, from my grandparents’ experience, is to cultivate relationships within the family and the community.

    People need people. When things get hard, we need each other even more.

    That said— I’m not good at it. More than a bit misfit, and a little misanthropic in my advancing age.