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Great, something else to think about? As if the last several weeks haven’t been enough of a whirlwind, we now need to prepare for a recession? Yes, we do. And I’ve got five great suggestions to help you with your preparations.
What started as a warning from afar, soon became a warning at home. When the CDC announced we should expect schools and businesses to close because of COVID-19, many of us thought they were overreacting. When the toilet paper started flying off the shelves, we laughed. We made memes. And then we stood in line to buy our own toilet paper, soap, hand sanitizer, and other items. We weren’t thinking of ways to prepare for the coming recession, we were thinking of ways to keep ourselves healthy and have a few comfort items during quarantine.
Now here we are, only a few weeks later, with nary a roll of TP on the shelves, schools are shut down, restaurants are closed or offering only drive-thru or curbside service. And the news reports thousands of cases and many deaths. It’s more important than ever to keep ourselves and our elderly family and friends healthy, so we’re hunkering down at home.
Recession may already be here
Thinking about ways to prepare for a recession might be the last thing on your mind. I understand this, I really do. But I also think now is the exact time to get ready. While what is happening right now is terrible, this may only be the beginning.
The Coronavirus Recession is on the horizon, and some say already here. On March 19, Bank of America Chief U.S. Economist Michelle Meyer said, “We are officially declaring that the economy has fallen into a recession…joining the rest of the world, and it is a deep plunge,” Meyer said. “Jobs will be lost, wealth will be destroyed and confidence depressed.”
Like many of you, we’re affected by this. My husband works for a school district. At first, we thought he’d still have part-time work. But now, with new county-wide regulations, he’s off indefinitely. We don’t know the details of what being off work will entail or the financial aspect of it. Even so, we’re adding all we can to our stockpile so we can be prepared for what could be not only a recession but possibly…more.
“We’re going to have to either have a Great Depression, or figure out a way to send people back to work, even though that’s risky,” former White House economist Kevin Hassett said on March 19.
Today, right now, is the time to start preparing for a recession. Here’s the five things we’re doing, not necessarily in the order we are doing them.
No New Debt
It’s so tempting to use our credit cards and go out and buy—or more likely, because of our need to isolate, order online—a huge stockpile of things. Not only is this not the time to be using credit, but it’s also not the time to stockpile with wild abandon. In many areas, grocery stores are limiting the number of like-items that can be purchased.
Taking on debt is rarely a good idea, but it’s especially not a good idea with the precarious financial situation our nation faces. You don’t need the stress of additional or increased payments. If you have been saving to buy a house or car, hold on to that money. Let it help you get through the days ahead. Make no new debt your motto as you prepare for the coming recession.
I’m a huge Dave Ramsey fan. He breaks down getting out of debt into baby steps. Dave’s advice for this time is to focus on your four walls: food, utilities, shelter, and transportation. After you’ve covered those, focus on building your savings. Baby step #1 is to put $1000 in your savings for an emergency fund. Focus on getting that $1000 set aside. If you already have that, Baby step #2 is (normally) to start paying off debt. However, now is not the time to put extra money toward debt. Pay your minimums, and put all you can toward savings as you prepare for the coming recession.
I know for many this may seem an incredibly large challenge. Coronavirus-related layoffs are skyrocketing. One of my daughters, who works at a restaurant, is off for at least eight weeks. Unemployment payments will help but won’t fully replace her income. I’m still encouraging her to save, save, save. In some ways, this world we now find ourselves living in will make it easier to avoid discretionary spending. Restaurants are closed. Movie theaters are closed. We’re hunkering down so we can save on fuel. We’re hanging out at home, and we can now cook those meals we never had time to cook before. Put the money your saving by staying home toward your emergency fund. Getting a tax refund? Save it. Have a side hustle? Bank those earnings.
Once you have the $1000 in your emergency breathe a sigh of relief and then keep saving. Imagine how nice it would be to have at least one month’s regular income saved before the official recession hits. When will that happen? Best estimates say the official announcement will be in July.
Make Smart Purchases
While a healthy savings account will help ease that knot in your stomach when the recession is announced, a well-stocked pantry will also provide a huge measure of comfort. However, right now is not to time to stockpile. First, you probably won’t be able to buy multiple items of anything. My local grocery store has bare shelves. What is in stock has a two-item limit on identical items. Things like flour, paper products, pasta, rice, canned vegetables, soups, and meat were either completely sold out or very limited. My store is also suspending their sales flyer so the normal loss-leader items were not available. I did find many inexpensive and well-stocked items in the ethnic food sections, so if your shelves are looking bare, try those places. I found canned beans, packages of pasta (weird shapes), and cans of veggies.
When I’m normally filling my pantry, I order in bulk through Amazon, Azure Standard, or (gasp) Walmart. Amazon Pantry is currently closed. (2021 update: Amazon Pantry has reopened). It is still possible to order from their grocery section, but expect delayed shipping. Azure Standard is still open for business but is also experience delays and shortages. Most of the items I would normally order from Walmart are hit or miss on availability. I do keep checking back on all of these sources so when the supply issues subside, I can continue to stock my pantry to help prepare for the coming recession.
Speaking of stocking the pantry, have you read my book Stock the Real Food Pantry? Allow it to be your guide to fill your own pantry!
Now is the time to be looking outside the box. As part of our budget tightening strategies, we’re eliminating unnecessary expenses. Assorted memberships we had are now going by the wayside as they are not being renewed. Activities we enjoy, such as alpine skiing, is closed. Our martial arts studio is closed.
Fortunately, we’re in an area where we can still get outside and enjoy nature. We can snowshoe at higher elevations and hike on our property. We’ll also continue some of our martial arts forms at home. And I’ll continue my healthy moving practice. Our physical health continues to be a priority even as we prepare for the coming recession.
In some areas, people are being encouraged to stay inside. California is on very strict lockdown, but Governor Newsom did say, “You can still take your kids outside, practicing common sense and social distancing. You can still walk your dog…” Take advantage of this! Get outside (and away from the TV). You’ll feel better.
Or try these other fun things!
For the Family
- My friend Wardee at Traditional Cooking School has classes on sourdough, fermenting, pressure cooking, and so much more. My son and I love taking these classes together. Try Wardee’s classes free for 30 days. Also check out her Free Traditional Cooking Cupboard.
- There is so much to learn at The Great Courses Plus! They have thousands of steaming videos on hundreds of subjects. Try it free for 14 days.
- Looking for history and economics? Check out Liberty Classroom. They offer top Libertarian professors teaching real U.S. history, Western civilization, and free-market economics from professors you can trust. There are several free courses to get you started (look under the Free Stuff tab).
- Try Amazon’s Kindle Unlimited for Free. (PS: All my fiction books are available to read for free with a Kindle Unlimited subscription)
- Audible is offering hundreds of titles completely free. Audible says, “The collection has been handpicked by our editors and is a mix of stories to entertain, engage, and inform young people, ages 0–18.” I say, there are some great stories for the whole family! Be sure to check the classics section. Visit stories.audible.com from any web browser (you don’t even need an app).
Be the Light
In my area, I’m seeing amazing acts of kindness — neighbors, churches, museums, and businesses stepping up and offering help, food, and more (while maintaining proper social distancing). I pray this will continue as the novelty of our situation wears off.
My friend Anissa Stringer says in the description of her book 365 Acts of Kindness: Making the World a Better Place, One Day at a Time, “The world is a scary place, and sometimes it can feel like no one cares. That’s why kindness matters. It matters a lot. One act of kindness can change someone’s day–it can even change their life. And with 365 Acts of Kindness, YOU have the power to be an agent of change and make the world a better place!”
Jesus said, “You are the light of the world. A city on a hill cannot be hidden. Neither do people light a lamp and put it under a basket. Instead, they set it on a stand, and it gives light to everyone in the house. In the same way, let your light shine before men, that they may see your good deeds and glorify your Father in heaven.” Matthew 5: 14-16.
Now is the time for us to be the light. To be kind. To remember we’re not in this alone as we prepare for the coming recession.
God bless you.