Surviving Hard Times
By Steve Gillman
The keys to surviving during hard times are not so much about
eating cheap noodles or becoming a survivalist as they are about
self control and smart planning. That's what the following tips
are based on. As I write these words (2009) job losses are still
growing, but whenever you read this you'll find a good guide
to preparing for personal hard times.
Let's keep this in perspective though. Maybe we are entering
another great depression, but it's worth noting that at it's
worst last time (in the 1930s), there was only 25% unemployment.
I am sure some of you are saying "only!?" I don;t mean
to suggest that those who were and are unemployed don't matter,
but that statistic does mean 75% of people who wanted jobs had
them at the time.
The first step for surviving hard times then, is to try to
be in that 75%. Actually it's more likely that 85% will retain
their jobs this time around, so your odds are better. What if
you work in an industry which is likely to face large job losses?
Start looking around at what else you can do before you lose
your job. Go get educated or learn some new skills if necessary.
You should have an idea or even a list of places where you'll
immediately start applying for jobs if you lose your current
Be valuable to your current employer. The one employee who
knows how to run some machine or fill out some forms or do any
other obscure task which is essential, is less likely to be laid
off. Perhaps find ways to save the company money. One way or
another, be the employee that management can't afford to lose
Still, whatever you do, your job can be lost. A company might
just go out of business after all. And if you lose the job at
the worst time it may mean months before you can find work. You
need to prepare for this possibility. You can start by taking
the three basic steps outlined below.
1. Stock Up On Necessities
Stock up on food and other household necessities. If you really
don't have the money to buy two months worth of supplies just
start buying a little bit more than normal each time you shop.
Stock up on everything from toilet paper to canned peas, and
have enough food and other items stashed to survive a loss of
income for a couple months.
2. Save Money
Is this the right time to start saving money? It's almost
always the right time. That savings account should be built up
until you have enough to live on for at least several months.
It is also not too extreme to have a few hundred dollars in cash
hidden in your basement. Banks have failed before, and it can
take a few weeks for the FDIC to sort things out and give you
access to your money.
3. Reduce Regular Expenses
One of the most important steps you can take is to cut your
regular expenses. For the sake of an example, let's suppose you're
living on $2,500 per month from a job that's not easily replaceable.
If you lose it you'll have to take a $7 per hour fast food position.
That sounds awful, but you can handle it if you cut your basic
expenses in half before it happens.
Start by paying down any debt you have as fast as possible,
starting with the highest-interest debt. That will be your credit
cards most likely. Rolling such debts into a home-refinance means
you essentially convert short-term debt into long-term debt and
pay far more in interest as a result, so this is not normally
a good idea. On the other hand if losing your job seem likely,
you may want to reduce your monthly debt payments in this way,
and you might even lower your house payment.
Consider every single thing that you regularly spend money
on and find ways to reduce the cost. Install fluorescent bulbs
to cut electrical costs, turn down the thermostat when you are
out of the house, buy a low-flow shower head and cut to basic
cable if necessary. You could even decide to cut back to one
car instead of two, even if you own them outright. It still saves
you the costs of insurance, plates and ongoing maintenance.
Surviving Hard Times
Become indispensable at work, explore other job options, learn
new skills and have a contingency plan or two for worst-case
scenarios. Fill your cupboards, start setting aside some money
for hard times and pay down debts as fast as possible. Learn
to live on less. Take these steps to either keep your job or
lose it without that becoming a disaster.
That's not only a recipe for how to survive hard times, but
it will also make you more financially secure in any economic
situation. And if your job is secure but you take the steps outlined
above anyhow, you might soon have enough excess income and saving
to take a nice vacation or pursue other goals.
For a much more comprehensive look at how to be ready for
anything, read A
Survival Guide for Interesting Times, part of The