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Survival in an Economic Depression

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For most people survival in a true economic depression or recession is simply about holding onto that job and waiting for times to get better. In fact, for the majority of people who still have jobs in even the most severe depressions, times are that bad. After all, prices often fall or at least stop rising, so one's standard of living may even improve. Meanwhile investments ranging from real estate to stocks go on sale for steep discounts, providing a great opportunity to make more money if you already have some.

Of course jobs are lost and businesses fail. So let's take a look at how to avoid these possibilities, or at least reduce the risk. Then we'll look at how to be ready for the worst.

Keeping Your Job During a Depression

Some industries are always hot harder than others during tough economic times. Those businesses that provide basic necessities are at least risk of failure, and so employees in those industries have less risk of job loss. Thus, if you can see the troubles coming and have the chance to change jobs to one that is more secure, that could be a great start.

Wherever you work you can increase your odds of keeping the job - unless the business fails completely. For greater job security do good work, but also by make sure that the appropriate superiors know you're a good worker. If possible, find a way to demonstrate not just hard work, but a real and measurable contribution to the company. If it is clear that you generate a lot of sales, for example, your boss can see that losing you would mean losing money rather than saving it.

You might also want to pay close attention to where the most secure jobs in your company are. Talk to those who work in human resources, or directly to the boss if necessary. Find out where layoffs are coming and transfer out of those areas if you need to.

Keeping Your Business

Survival in an economic depression is tricky for many businesses. It can be difficult if not impossible to maintain sales in your restaurant, for example, if people are just eating out less. To survive the tough times you may need to act fast to cut costs.

Stop hiring if there is any chance that you'll be laying employees off. Let natural attrition reduce your payroll to the extent possible (workers retire or move and quit). This is better for morale than laying off workers, but do that too if you still have too many employees. Another alternative is to offer time off (unpaid) to anyone who wants it, so you can keep the same staff at a lower cost by reducing hours. This allows you more flexibility if there are busy times and you need a full staff.

If you begin to lose money, don;t wait for times to get better. Take more drastic actions fast. Work more hours in place of employees. List all expenses and find ways to cut each one if possible. Negotiate lower rent by explaining to the landlord your financial situation and possibly agreeing to higher rent in the future when times are better.

Marketing and advertising may be as necessary or more so than in good times. Try to stick to those plans that have measurable results though. You can't afford a $3,000 advertising campaign that brings in only $2,000 in business and $500 in additional profit. Use coupons and count them, or carefully track sales during radio or other promotions.

Keeping Your Lifestyle

The key to survival in an economic depression is to be prepared, and this is especially true in your personal life. You might lose that job or business. Are you ready? If not, start taking steps now to be ready for the worst.

Eliminate your debts for starters. Star with those that have the highest interest rates. Once the highest is paid off, allocate the money that was going to that one to the next highest, and so on. Work overtime if necessary and put all the extra money towards debt reduction.

Then start looking for ways to lower your other regular expenses. It isn't nearly as important to stop paying for expensive haircuts or buying good food as it is to cut your rent or get rid of that television payment or insurance for the second car you don't need. If you lose your job you can stop going out to eat or to movies that day and so lower your expenditures immediately. Your rent, payments and other more "fixed" expenses are not so easily reduced, so do it beforehand.

Of course, if you are serious about your survival in an economic depression, and you are not saving money, you might need to reduce those less necessary expenditures too. Buy frozen pizza instead of having it delivered. You need to have a safety cushion of money to be prepared for the worst.

Related page: Economic Collapse - Survival Tips



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