How to Prepare for an Economic Collapse

The United States currently owes more debt than ever before, and economists fear a point of no return. The U.S. won’t be able to repay their debt, the economy will crash.

Shocking reports show that more than 3/4 of Americans live paycheck to paycheck. Less than fifty percent of all Americans could survive 6 months after a major life event crushed their finances.

People are unprepared for what is coming. They are either apathetic or refuse to admit the likelihood of a worldwide economic crash.

We all need to make most of the resources we have regardless of how limited or plentiful they are at any given time. Natural disaster events and other hard times are unpredictable and good times don’t last forever.

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If you thought the financial collapse of 2008 and the subsequent Great Recession were bad, it was just the tip of the iceberg. A more severe event is about to hit us, and it could be sooner than you think.

Could you forgive yourself if you didn’t prepare and had to watch your family slowly run out of food and supplies?

The symptoms of Economic Collapse

You have only to look at other financial crises around the world to see what could happen:

  • 2015 Chinese stock market crash
  • 2014 Russian Financial Crisis
  • European Debt Crisis 2009-2019
  • Asian Financial Crisis of 1997
  • Black Monday in 1987

Many other countries have experienced a debt crisis in the last decade including the Greek government, Portugal, Venezuela, Ukraine, Turkey.

The Financial System as We Know it Will Crash

  • Bond and stock markets will collapse as panic selling causes abrupt, dramatic price declines.
  • Widespread asset deflation when houses lose their value and banks write off bad debt in the trillions.
  • Sky-high inflation will grip the economy, followed by possible hyperinflation of commodities such as gas, food and livestock.
  • Major currencies such as the Euro and the US Dollar will crash like dominos.
  • Secondary, less predictable events may include a spike in unemployment, travel restrictions, severe economic depression, protective tariffs and currency controls.

Lawlessness Will Govern the Land

The overriding issues during an economic breakdown are increased activity including dangerous rioting, and looting.

Law enforcement officials will have little control over the pockets of violence that are likely to break out in the streets. Martial law may be enacted across the nation.

  • As anarchy becomes the new reigning power, you’ll need to prepare a defensive strategy to protect yourself and your preps not only from looting strangers but from looting neighbors.
  • Never assume that your area won’t fall into lawlessness – always expect the worst.
  • Keep your BOB on hand, plan escape routes, and locate safe havens. The best plan is to avoid confronting a mob: it is better to keep your distance than to risk losing in a fight over supplies.

Food Shortages Will Be Prevalent

Food shortages are inevitable in an economic meltdown. The food industry operates on very small profit margins and can only survive when invoices are paid quickly.

As extreme inflation cripples marginal businesses, including suppliers, wholesalers, and retailers, payments will be delayed and then cease. As inflation persists, more businesses will fail, and food will become a scarce commodity.

  • Grocery stores only stock about three days’ worth of food at a time. If currency still holds some value, people will stampede to the local supermarkets and buy as much as they can. After that, shelves will be raided by looters and empty out in no time.
  • Start stockpiling early. Make enough space to store freeze-dried meals, canned items, and dry goods. Check to ensure that the temperature and humidity requirements on your preps match the climate of your storage space.
  • Keep a balanced stockpile of nutritious, mineral, and energy-rich foodstuffs. You’ll need to ensure that your food contains enough protein, vitamins, fats, minerals, and carbohydrates to keep your immune system strong and your energy levels up.
  • Many preppers make the mistake of stocking up on high-calorie foods and neglecting those with crucial vitamin and mineral content. Your body cannot afford to suffer a deficiency, so ensure that your stockpile contains enough iron, magnesium, calcium, and vitamins.
  • Carbohydrates are essential to survival because they contain valuable energy needed to keep you physically resilient. Rice, flour, grains, pasta, and nuts have long shelf-lives and are very versatile.
  • Salt is a wonder-ingredient for curing beef, preserving fish, and adding flavor to otherwise bland dishes. Plus, it never goes bad!

Maybe you do have some food stockpiled and a way to cook without power. So, imagine you are, home and getting ready to sit down to eat during a SHTF scenario.

Suddenly, someone bursts in through your front door, waving a gun and demanding that you give him all your money and your supplies. What would happen? How would you make it if you were forced to give away some or all of your supplies?

Prepare for Economic Collapse (2019)

Here’s How You Prepare for an Economic Collapse

1) Reduce your Expenses Now

  • The smaller your financial footprint, the better off you’ll be in a crisis, and the more resources you’ll have at your disposal to get you through the worst of times.
  • Conserve electricity now. This not only gets your family in the habit of using electricity only when needed but it will reduce the amount you pay out monthly toward electricity costs.
  • Practice recycling, upcycling, and composting so that your family produces the least amount of garbage possible. See if you can eliminate the need to pay for garbage collection.
  • Save as much money as possible now. Instead of buying that new car or taking that luxury vacation, repair your current vehicle and take a vacation that costs less so you can save that money.
  • Look for ways to cut back on other monthly expenses too. Consider alternate companies for car insurance, cable TV, your cell phone plan, even your utility distribution companies. Any little discount you can get on your monthly bills now should then be used to pay down credit cards and other debt.
  • Cut back on those little luxury and convenience items that we often don’t think about or even count in our budget. Those doughnuts after church on Sunday morning or that coffee every morning at McDonald’s before work or the trip to Taco Bell after soccer practice because you didn’t plan a meal and it’s late. All of those little expenses add up over time. Start cutting them out now and use that extra toward paying down debt or savings.

2) Find Ways to Increase your Income

Start a side business. You’ll need an immediate source of income, so consider whether you can generate cash with a home-based business.

Choose something with little to no startup costs. If possible, choose one which allows for you to legally deduct prepping expenses (such as survival gear purchases) from your small business’ takings.

Thoroughly go through your home and belongings. If you own things you aren’t using frequently, consider selling those items. Items you sell will bring in money that you can put into savings, or use to buy supplies or pay off debt.

Learn how to barter. You may as well melt down your plastic when disaster strikes, because credit and debit cards are likely to stop working during an economic crisis.

Instead, learn the age-old art of bartering and start doing using it before SHTF. Being able to barter for some items means you can use the money you would have spent on those items on something else.

3) Become Self-Sufficient

When SHTF, systems that we depend on now will cease to exist. Survival won’t be a matter of going to the grocery store to buy food or turning on a faucet to get a drink of water.

In no time at all, the services we count on to survive now will disappear and that includes things like doctors, pharmacies, and public utilities.

  • Start Stockpiling Supplies including non-perishable food, adequate fuel for your vehicle, firearms and ammunition, anything that you currently use every day to survive.
  • Make Sure to Have a Reliable Water Supply including not only bottled water but also a plan to get water if public utility systems or your electric powered pump fails.
  • Learn to Grow your Own Food. Start practicing your gardening skills now while you have time, so that you can master them and immediately begin bartering your crops post-collapse.
  • Keep medical and personal hygiene supplies on hand. Things like bandages, antibiotics, and toilet paper will be the first things to disappear from store shelves. Stockpile these now to save you inconvenience later.
  • Prepare a bug out bag in case you are forced to leave. I have a comprehensive list of essentials in this article.

4) Get Out of Debt

The global financial system is approaching crisis mode. In a situation like this, it’s best to ease your financial commitments. This means getting rid of debt. The last thing you need when SHTF is to have a mob of debt collectors knocking on your door.

  • Use money you save to create an emergency fund. An emergency fund should cover at least six months of expenses. Every dollar saved is $1.25 earned because savings are not taxed. Keep your fund in several different locations, including some hidden in clever places around your home.
  • Pay off as much debt as possible and take that money each month and put it into savings. Use an app such Acorn to round up purchases to the nearest one dollar and automatically put that change amount into a savings account. You won’t miss less than a dollar at a time and you can build a savings account up quickly.
  • Stop using credit cards for unplanned purchases. Research and adopt a cash only system for as many purchases as possible. Don’t close your accounts, just put the cards away and don’t use them until your debt is under control and you know you can pay the purchase off quickly.

5) Get Educated and Stay Flexible

  • Stay up to date on survival knowledge and skills such as gardening, basic farming, self-defense, and first aid. Medical professionals will be scarce so learn about natural remedies for common ailments and prepare to provide first aid surrounded by chaos.
  • Prepare yourself physically and mentally. You’ll need to be at peak fitness when SHTF. Try to spend less time sitting on the couch watching TV. Condition yourself for a life in harsh conditions, where finding food and physical labor are daily tasks.
  • Train your mind to deal with difficult situations calmly and rationally. Remember that the life of the survivor is devoid of comforts and luxuries.
  • Identify your strengths and weaknesses, and assess opportunities, and threats. Review all of these carefully and then formulate a plan to address them now before SHTF.
  • Make sure you have proper insurance. Find out which types of disasters are common in your area and make sure you have adequate insurance coverage. Don’t assume that your home and property or car will be covered in a natural disaster. Many people have been victims of a flood, fire, or other natural disaster and didn’t realize their home wasn’t covered until it was too late. Call your agent and discuss possible scenarios and add any insurance you may need to have.

6) Get Some Land

After you have your emergency fund and have paid off debt, considering buying a piece of land in a rural or out of the way location. Use the land as either a bug out location or as a future permanent residence.

Carefully consider any land purchase to ensure that it will be enough to sustain you and your family when SHTF.

You will need to be able to grow your own food and have a reliable source of water, such as a year-round creek or spring. An adequate section of wooded area is great too so you can harvest that for fires and building projects as needed.

Any land that you purchase should be as remote as possible. It should be located at least 7-10 miles from any major highway or interstate.

The average person can walk 5-7 miles, in a SHTF scenario you want to be at least that far away from crowds of people who may be stranded, desperate, and trying to find supplies.

7) Stop Relying on the Dollar

  • Buy precious metals. Gold and silver are used to hedge against hyperinflation. In fact, the value of gold can even increase during economic crises, so have on hand some shiny hard assets in small, tradable denominations. While federal reserves around the world are printing worthless paper money, you’ll have gold or silver to use as legal tender.
  • Other hard assets which hold their value during a collapse include livestock, gas, oil, and crops. While paper money will become worthless, these items will never lose their value. It’s better to buy these while times are good, because prices will skyrocket when SHTF.
  • Distance yourself from the affected currency. During hyperinflation, your currency will rapidly depreciate. Consider moving your cash to offshore accounts where the foreign currency is more stable.
  • Consider alternative energy methods to power your home. If you own your land and it’s in a remote location where looting won’t be overwhelming, using solar or wind systems to power your home can be very beneficial now and lifesaving when SHTF.

8) Networking

Suicide, mental health issues, use of anti-depressants, tranquilizers, and sleeping pills all increase during an economic crisis. Alcohol and drug use skyrockets.

The loss of jobs, homes, and income takes a massive emotional toll on people. Sudden financial insecurity can make anyone feel depressed, anxious, and hopeless. The additional fear of becoming a victim of violence, and looting only makes things worse.

  • Keep your family environment as healthy as possible at all times. Solid family bonding provides emotional stability for kids and adults alike.
  • Talk about things. Explain the current events to your kids, because they’ll hear about it anyway and it’s best if they learn about it from you first.
  • Seek support from your partner. This provides emotional intimacy and a safe space to discuss fears and feelings about what’s happening around you.
  • Take part in a recreational activity. Doing something you enjoy, even if it’s taking a brisk walk, working out, or preparing a nice meal, activities like this will not only keep you fit but will give your morale a boost.
  • Get enough sleep. Sleep does wonders for rejuvenating the body and mind.
  • Know which neighbors you can count on and which ones you can’t. Find like-minded people and develop bartering relationships before chaos runs high.

9) Reuse and Upcycle

My dad’s mother, who lived through the Great Depression, was always really good at reusing and upcycling pretty much everything on a daily basis.

That tin foil that covered the turkey as it roasted? It got torn into squares and used to wrap up leftover turkey or to wrap a turkey sandwich in my grandfather’s lunchbox when he went back to work.

Because they lived during the Great Depression, when everyone struggled financially, my grandmother’s generation and many of their children (Baby Boomers) are good at reusing and upcycling.

They grew up with very little and thus to get by everything had to be used to its limit before anything new could be purchased.

  • Save and reuse things that come into your home such as cardboard, tin foil, plastic take out containers, toilet paper, plastic bags and paper towel tubes.
  • Collect free stuff such as condiments, trial samples, and free giveaways from hospitals, hotels, and other hospitality companies.

10) Develop a keen eye for good deals

The ability to find a good deal is a skill that our ancestors had no choice but to perfect. To prepare for an economic collapse, you can develop this deal finding ability too. The better deals you can get, the more money you can save toward something else that you may need.

  • Visit yard sales and flea markets in search of high-quality items that other people no longer need or want and thus will sell cheap.
  • Track the sales at your local food and supply stores. Most stores have a cycle for sale items. Once you know the cycle for your area, you can figure out how to wait to stockpile on items until they go on sale again.
  • Consider buying food and supplies in bulk if the pricing is better and it’s an item that you know you will use over time.

11) Diversify Your Income Streams & Portfolio

For as long as I can remember, the way to be successful was to get a job at a great company and work there until you were eligible to retire with a pension.

My parents and their parents prioritized loyalty to their employers because their goal was to retire from the company with a pension. The world just simply doesn’t work like that any longer.

In order to prepare for an economic collapse, you need to diversify your income sources. Don’t put all your eggs into one basket, so to speak.

You can work a part-time or full-time job if that’s your thing, but think of other ways that you can supplement your income.

What would you rely on if your company job suddenly disappeared? That would happen in an economic collapse.

Here are just some of the ways you can diversify your income to prepare for an economic collapse:

  • Learn and practice a trade skill other people will need after a collapse, such as carpentry, plumbing, or blacksmithing.
  • Start your own business in an area that will still be needed after an economic collapse, such as baking, landscaping, midwifery, or alternative medicine. The freelance industry is booming right now so it’s a great time to strike out on your own and doing so now will mean you build a client base before SHTF that might help you survive afterwards.
  • Diversify your portfolio so that in an economic collapse, you can avoid losing everything at once when a specific industry goes bankrupt.

Or, you might consider making your side hustle your full-time job for the duration of the crisis, especially if it is something that is evergreen, and typically survives economic downturn.

Cutting lawns and landscaping is a good example. Some people who are crafty might make small goods or offer services that save people money.

A good friend of mine once had to turn to making handmade pistol stands during a period of job loss in a bad economy, and did so well at it that it actually became his full-time gig that he continues to this day.

Consider offering handyman services to people in your neighborhood, especially the elderly, infirm or people who lack such skills.

People probably will not be investing in serious home renovations during a time like this, but everyone always needs fences painted, gutters cleaned out, weeds pulled, doors trued and a dozen other small but challenging tasks completed.

Internet-based businesses and money-making ventures can be ideal in times like these since they have so little start-up cost and will not require you to leave your home.

You could do things like writing, consulting, coding and more all from the comfort of your desk chair.

One of the smartest possible plays you can make is to get an education and certification in a field which is considered essential by both the citizenry and the government during times of economic collapse, since money will always seem to continually flow to these sectors right up until the bitter end.

Hands-on medical professions are a great example, as are any jobs working for electrical utility companies, gas companies, power plant operation and similar infrastructure-related jobs.

If you are fortunate enough to be working in a government position, rejoice, since chances are it will be extremely difficult to fire you in the first place.

12) Earn Money from Homesteading

If you have or are planning to own a homestead, make sure you consider ways that you can earn money from homesteading which can supplement your main income and serve as a fall back if your job disappears.

  • Raise and sell livestock to other homesteaders
  • Butcher and sell meat to consumers who want to eat organic
  • Start a garden co-op with relatives or neighbors.
  • Operate a worm farm and sell bait to those who want or need to fish
  • Start a seed sales business
  • Raise chickens or other poultry and sell the eggs
  • Grow an orchard or plant berries for a U-pick business
  • Become a beekeeper and collect and sell honey
  • Split and sell firewood

13) Live every day as if the economic collapse has already happened.

When the financial banking crisis of 2008 happened, very few, if any experts predicted it. There was no advance warning.

There was no time to get your financial ducks in a row. So live each day as if the economic collapse has already happened.

Challenge yourself to save up cash for new purchases, instead of going into debt for it. Better yet, make what you have work and put the money you would have spent into your preps.

Negotiate barter agreements with neighbors and relatives. Bartering for at least some of the items you need will help you save your cash for necessary new purchases or for your economic collapse fund. Having a bartering system in place pre-SHTF will also make bartering easier once an economic collapse occurs.

Learn how to make your money work for you. Most people who can reach wealthy status, do so because they figured out early on how to make money work for them. They invest in a porfolio, they invest in innovative companies, purchase land, etc.

The looming breakdown of our financial system is a confirmed threat to our society. You need to stay ahead of the game, anticipate disaster, and make sure you’re well-prepared to handle it.

Don’t put off until tomorrow what you can prepare for today. Maintain your skills and grow your knowledge daily, as these skills could save your life.

How I'm Preparing For Economic Collapse

We don’t know for certain what the future holds, but we can own it as best we can by being prepared and well-informed. Are you prepared for an economic crisis? How will you protect your assets and stay afloat?

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updated by Megan Stewart 11/23/2019

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