How To Prepare For Another Great Depression

Have you ever given thought on how to prepare for another Great Depression, should it happen?

Most of us have heard about the Great Depression, but preparing for it? I kinda doubt that it’s crossed the majority of Americans minds, lately. There may even be some that have never heard of it or even know what it was.

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what was the great depression?

The Great Depression was a worldwide economic downturn that began in 1929 and lasted well until the late 1930’s. It was the longest and most severe depression ever experienced by the industrialized Western world.

There is a common misconception that the the great stock market crash of 1929 is what caused the Great Depression.  In reality, that was the proverbial straw that broke the camel’s back.

Although it originated in the United States, the Great Depression caused severe unemployment and acute deflation in almost every country of the world. Its social and cultural effects were staggering, especially in the United States, where the Great Depression represented the greatest hardship & suffering faced by so many Americans since the Civil War.

Before the stock market crashed, though, there were many things that occurred that began weakening America’s economy. Here are some major economic turns that started the decline that ultimately ended with the stock market crash:

• Production declined.
• Unemployment was already on the rise.
• Stock prices were inflated.
• Wages were low.
• Consumer debt was high.
• The agricultural sector was struggling.
• Consumer spending slowed.
• Factory production slowed.

If you compare this list to what is happening today, we are seeing many similarities in our economy. For me, the red flags are certainly going up in several categories. I don’t think there’s a reason to panic just yet, but I do believe that we need to know how to prepare for another Great Depression, if one happens.

How to prepare for another great depression

The Great Depression brought hardship, homelessness and hunger to millions, but for the most part, that generation survived. There were many lessons that were learned and if you talk to someone who was alive during that time, there’s a wealth of information to be gained from them on how to live frugally and how to prepare for and survive another great depression, ourselves if we have to.

Many of us have grandparents (or even great grand parents) or other friends or relatives that were either born or raised during the worst economic times in our nation’s history and can still remember the how they lived and were able to get through those adverse times. 

If you’re lucky enough to still have these people in your life or you know someone that was alive then, it would be a great lesson in history to ask them what it was like and what they did to get by during that time.

My own mother was born during the 30’s and has lived her whole life implementing so many wonderful frugal tips that were taught to her, growing up.  I feel blessed that she passed many of these same lessons, tips & tricks down to me and my brothers. 

I know that it’s hard to imagine, in this day & age, the hardships that the people of that era went through, but we need to heed the warnings, pay attention to the world around us and try and be as prepared as we possibly can in the event of a downturned economy.

Here are some of the best tips on how to prepare for another great depression:

Stockpile essentials

One of the first things that will run out during a depression will be food and clean water. We’ve seen this very thing happen in Venezuela.  Once items do return to the shelves, they may be rationed or prices may be severely inflated.

We’ve witnessed some of this firsthand during the coronavirus panic. Since we know natural disasters and economic upheaval are always possibilities, it is wise to start a stockpile of emergency food and tools for water filtration. Similarly, begin thinking about nonperishable items that will likely increase in price due to inflation should a depression occur. Remember the great toilet paper shortage of 2020??

 Some items of necessity to stock up on might be:

• Water
• Toilet paper/paper products
• Coffee,
• Batteries,
• Ammo
• Medical supplies 
• Medicine & prescriptions
• Pet food/supplies
• Hygiene products
• Seeds

Most of these items will likely rise in cost. If you start to stockpile them today, it could possibly save a significant amount of money tomorrow. And who knows… you might even be able to use some of them to barter with, should they become scarce.

Have a garden

One of the ways to survive recessions or a depression is to know how to grow your own food. Just about every household had a garden in the 30’s & 40’s. It was a necessity. Growing a garden, though, will help you no matter what the economy is like. Having your own garden will save money, enable you to eat healthier and ensure you always have something to eat.

Cook from scratch

I can’t say enough about this tip if you really want to save a ton of money. Let’s face it…Cooking at home is way cheaper than eating out. It doesn’t take a rocket scientist to figure out that processed, pre-packaged foods are not only expensive, but not near as healthy as using fresh ingredients AND knowing what’s actually in your food. 

Let’s face it…It’s much cheaper to buy ingredients than pre-packaged meals, any day.

Reduce, reuse & recycle

Before throwing something away, ask yourself if there’s another way to reuse this item. You might be amazed and what you can come up with. When I was a kid, we had a whole set of Bama jelly jars that were used as drinking glasses. If you can put something to use in a new way, not only will you save money, it keeps that item out of landfills, there by helping out the environment.

Back during the Great Depression, nothing was wasted or thrown out. The motto for most families during that time was: “Use it up, wear it out, make do or do without.” 

Reduce or eliminate your debt

Debt is a problem no matter what’s going on with the economy, but it’s an even bigger problem if the economy turns downward. Job losses tend to increase and investments may lose value. You don’t want or need to be saddled with debt when this happens.

If you have student loans, credit cards, medical debts or any other types of loans, you need to eliminate as much as possible…fast!  That way, should you lose your job, it will make unemployment much easier to deal with. If you can’t pay off all your debts, try and get as much paid down as possible. The more you eliminate, the stronger you will be financially when things go south!

Reduce your spending & Learn to Live on less

Start looking for ways to reduce spending & cut unnecessary expenses. Set a grocery budget and stick to it, cancel unused subscriptions, shop around for lower car and homeowners’s insurance. Look for as many ways possible to reduce your living expenses and then use the savings to either pay down debt or put into your emergency fund. This is the best way I know on how to prepare for another great depression. If you start this process now, it may ease the pain & suffering when times really do get tough.

Build your emergency savings

A survey done by GoBankingRates late in 2019 found that 69% of Americans have less than $1,000 in savings. That includes 45% who report having no savings at all. That’s a terrifying statistic and it illustrates the fact that most Americans are living paycheck to paycheck. In other words…Barely getting by.  If you have a “somewhat” funded emergency fund and happen to lose your job, like so many people did during the Great Depression, at least you’d have some money to help you get by. It would be ideal to put at least 20% of each paycheck into the fund, but if that’s not possible, save as much as you can.  Every little bit helps.

Reduce your energy consumption

Look for ways to lower your utility bills. Utilities encompass more than just electricity.  There are so many ways to save in this area because this is one area that we tend to waste the most. Check out:  How To Save Money On Utilities for a ton of ideas!

Learn basic skills

Do whatever you can to learn the skills that can help you get by, survive or you could possibly trade for food or water. This may include:

• Sewing, knitting, crocheting
• Cooking/baking
• Gardening
• Carpentry
• Canning
• Foraging
• Farming
• Hunting/Fishing
• Mechanics/Engineering (fixing something when it breaks)

Learning these basic skills can definitely ease many hardships you might face, plus they could actually become a commodity to help you get what you need to continue to survive. YouTube is a great source to learn how to do just about anything. Take advantage of this free resource while you can. Whether we’re in a economic downturn or not, it’s good to learn how to do any or all of these skills AND many of them would make great hobbies!

Acquire hunting & fishing supplies

During the Great Depression, many Americans were able to survive because they knew how to hunt, fish, and forage for food. That also means you need the right tool/supplies to do so. We have learned over the last couple of years that many every day items became hard to find.  This would also go for hunting & fishing gear, should the economy worsen. Instead of waiting, it may be a good idea to invest in these items before they become impossible to find.

Learn to make do with what you have

Lifestyle creep is real and we all know the old adage…”The more you make, the more you spend.” Unfortunately, we live in a society where instant gratification is more the norm than the exception and with the availability of credit, it’s no wonder that Americans are spending way more than they make! I hate to be the bearer of bad news, but learning how to live below your means is going to be key in knowing how to prepare for another Great Depression. As Thomas Jefferson once said, “Never spend your money before you have earned it.”

Learn how to barter

Bartering has been around since the beginning of time, but it was especially a common practice during the Great Depression. During that time, the agricultural economy got so bad that many farmers were forced to trade their crops and other goods to their creditors. Many people were laid off, causing them to barter their services directly with one another instead of paying/receiving cash for goods, services or skills.  In hard economic times, bartering may be the best, or perhaps, the only way to get the necessities you need.

Get a side hustle (or two…)

If you lose your job, which is common in recession/depression, your side hustle will be an important additional revenue stream. As a matter of fact, having multiple income streams can help ensure that you will have some sort of income, should you lose your main job. Side income(s) can supplement other sources, like a severance package or unemployment benefits, if you qualify. But if you can build your side hustle(s) to the point where you’re earning at least $1,000 per month while you still hold your full-time job, it would give you a little extra time you need to turn that side hustle in the something bigger or look for another job. 

Keep cash on hand

It’s always a good idea to keep on hand just in case whether we have a natural disaster or an economic collapse. When these things happen, we may not have access to any funds, especially if power is out for an extended time. In times of disaster, it’s not uncommon for people to panic and this causes even more problems. Most banks couldn’t handle a situation where everyone is trying to withdraw their money at the same time. If a cyber attack happens, no one would have time to go to the bank to withdraw anything. It almost sounds futuristic or sci-fi, but during these uncertain times, it’s best to be prepared for anything.

get healthy & stay that way

We all know how important exercise and nutrition is for our overall health, (and you may not think your health would have anything to do with how to prepare for another great depression), but what if medical care was not as readily available as it is right now? If you’ve ever thought about changing your lifestyle to a more healthy one, now’s the time to do it.

I realize that for some, that may be easier said than done, but we can all benefit to some degree, by getting enough rest & exercise and eating healthier.  We’ve all heard the old saying of “survival of the fittest”. If the economy plummets, you might need all the strength and good health you have to survive.

Tip** – YouTube is a great place to find a plethora of workout videos for every age and strength level. I would suggest starting off with a beginner workout and work up from there.  But remember, consistency is the key to getting better at just about anything.

Also check out Tips On How To Get Healthy On A Frugal Budget

Get involved with your neighbors/community

Get to know your neighbors today. During times of crisis, we need our neighbors. It’s better to get to know them now rather than waiting for a disaster to strike. You’ll know who you can call on when you need help or a certain tool or skill. You’ll also know whom you can trust.

Protect yourself, your family & your home

When inflation & unemployment rise, so does the crime rate. It causes a desperation in some people that will make them do desperate acts.  

I listed ammo, above, as one of the items that you may want to stockpile, if you can get it. We saw the ammo shortage in 2020 when the pandemic hit and still continues, for various reasons.

You will also want to tighten up the security of your home. Check all your doors & windows to see how easy it would be to gain entry.  If you don’t have one, you might want to install a home security system. This can be something as simple as one you could easily install yourself to a more elaborate system with 24/7 monitoring.

Having a way to protect yourself, your family and your home during economic crisis’ is critical when someone decides that they want what’s yours.

Maintain a current passport

Make sure your passport is current. If you need to flee the country, you will want to have your passport ready for travel.

The Bottom Line

We are living in uncertain times and life can be extremely unpredictable. While we can’t predict if or when a depression will happen, we can try and be as prepared as possible. These tips can show you how to prepare for another great depression so you aren’t taken off guard, financially, if and when the time comes. 

Do you have any tips for how to prepare for another great depression? Please share in the comments below.

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