How do U prep for an economic downturn??

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colonialgirl
Posts: 1764
Joined: Sat Aug 29, 2015 2:01 am
Location: Central Illinois

How do U prep for an economic downturn??

Post by colonialgirl »

Hi frugals -
Since the economy is always cyclical we know we are going to have an economic downturn in the future, When and how bad, no one know - that I really believe. But since we are frugal folk I thought maybe we could discuss what folks can do to prepare for bad times whenever they come. Might help some newbies and inspire some of us old time frugalers to action.

Want to kick this around? What do you do to prepare and what could you be doing that you are not doing right now?

blondeinbuffalo
Posts: 939
Joined: Fri Aug 28, 2015 5:37 am

Re: How do U prep for an economic downturn??

Post by blondeinbuffalo »

This is a great questions for the nebbies and the oldies! I am looking forward to everyones response.

1. We have an emergency fund, 6 months income. this is not to be touched by either one of us without the permission of the other.

2.. Practicing frugality all the time, and not livin large when more money comes in.
(we put our income tax return into the savings account for the household and reserve that for replacement and repairs for the cars and our home).

3. Finding that balance and learning to do with less. And being happy with that.

4. Due to the potentially harsh winters we have up here in buffalo we have a stockpile of food, 3 months worth which I do rotate in and out to avoid having to toss canned goods.

5. Dont be like the Joneses. Enjoy a simple meal at home, it is healthier and much less expensive.

6. Basically we keep our bills down, live off one of our incomes and save or invest the rest. we are older folks so for us right now travel and seeing the U.S. is important to us and we save so we can pay for this and not have to put it on a credit card.

7. Have credit cards, as many as you like, but, you must pay them off immediately, this was you stay in budget and you don't pay those awful interest charges. This helps me to see exactly were the money goes.

8. The most important to us, have a budget and stick to it allowing for a little flexibility.

hope this helps, looking forward to everyones response! we don not adjust for a downturn, we just keep doing what we do. cj

rinty
Posts: 1720
Joined: Fri Aug 28, 2015 3:54 am

Re: How do U prep for an economic downturn??

Post by rinty »

Good post, this isn't a " lets pretend " thing , we know this is coming.

Get rid of any, and all, debt. No debt is really sustainable. I remember 15% mortgage rates and high inflation. Switch to a 0% credit card and pay it off ASAP. Even if you have a low credit score you can get a 0% card that will switch to some insane rate once the 9 months or whatever are over on the 0% deal. Overpay, you can save masses on interest payments.

Teach your kids. I liked a quote I heard once saying" " if we don't teach them, society will teach them " and that is so true. They can get cocky and comfortable and reality BITES. Insist they save.

As to us, now............we garden like we couldn't buy it, it concentrates the mind (!!!) so we weren't just piddling around. Really pleased that we also found it enjoyable. But again, get real and look at prices. Yes, theres ALDI bargains but there are also crazy prices, Someone recently mentioned $7 Canadian for one cauliflower !!!!

Drive a good, sensible car.

I have been hardcore Yellow Stickering since December. You read about people doing their whole shop this way so I looked at it. It sounds anathema to those of us who shop with lists having meal planned beforehand because you find the DEALZ and meal plan around THEM...especially as far as fruit and veg are concerned. I buy our bread this way now. Good grief we can't make bread cheaper and that's with grinding our own wheat ! Yes, theres a lot of ready meals BUT I regularly see, yoghurts, cream, cheeses, there was a load of speciality welsh farm butter previously a lot more expensive but no w sat in the 10p section !!! The veg tends to be the ready prepared stuff for those who CANNOT chop a carrot..........but its okay. Last night was quiet and there were only 2 shelves but 2 shelves holding lamb, sausages, pre made beefburgers, chicken pieces and a LOT of fresh fish that was all freezable.............all 10p. This is WAY better than shopping at ALDI in my opinion.

mbrudnic
Posts: 2588
Joined: Fri Aug 28, 2015 7:57 am

Re: How do U prep for an economic downturn??

Post by mbrudnic »

I am at an age that in addition to getting my financial house in order, I need to keep my marketable skills up-to-date. I work in technology and it is easy to become an expert in a certain technology and then that technology phases out. I am worried abotu that as my expertise is in email. Companies are starting to outsource the management of their email meaning less people are needed. So I need to expand my skill set.

Shelsmiles
Posts: 265
Joined: Mon Aug 31, 2015 9:19 am

Re: How do U prep for an economic downturn??

Post by Shelsmiles »

Great topic. Excellent really.

We strive to be as debt free as possible. Right now we have some debt that we need to get out of but it is minimal and we are working on it. We do not have car payments etc. We have a mortgage and one credit item.

We do our best to secure as much of our own food as possible. This means we hunt, fish, garden, raise pigs and chickens, have laying hens, etc. It can be done on a small scale that is enough to provide for your family. It takes some time and some work. We also are sure to to process our own food so we are not paying someone else to do that. This means we cut, grind and wrap our own meat, we can and freeze our own veggies, etc. To some people it sounds a little bit like "Pioneer Days" at school but it isn't at all. We have a few acres in the country and we make the most of it. I make sure my freezers are full

I keep a well stocked pantry. I watch sales and I stock up on things I will use when it makes sense. I have a working pantry as well as a storage pantry and both are stocked. We could make do for a couple months without a trip to town if we had to with what we have on hand.

A fully funded emergency fund is great. Mine is currently in rebuild Mode, but truly you need one. The hit our businesses have taken over the last two years and the economic stress we have found ourselves in as a result - that fund was the difference between making it and not.

Keep your things in good repair. Make sure that the things you have are taken care of so that you have them when you need them,

Make connections. I try to establish connections with people who might like to barter some with me. It's always good to know who might have a log splitter but needs something you've got. Sure, you might not NEED to barter now, but setting up a few trades here and there opens people up to the idea and let's them know you are open to it. It saves cash and I've made some pretty huge trades in my time.

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Jackielou
Posts: 7366
Joined: Tue Aug 25, 2015 7:51 pm

Re: How do U prep for an economic downturn??

Post by Jackielou »

Since this economic downturn has already hit my country I am already seeing a bit of a decrease in our portfolio. No biggie unless it continues for a very long time.

All the ideas we have used through our frugal journey have been pretty much mentioned.

I do have a couple to add however.

Shop thrift stores, rummage sales, and garage sales. You never know what you will find.

Don't shop for the fun of it. I try to go out shopping only once a week (lately for some reason it has been a bit more at times). Saves money, time and fuel.

Find fun free things to do. Not too much of that in this city, but the library, museum, and some clubs are free.

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