Survival in an Economic Depression
By Steve Gillman
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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