Recession proof me. Again.
June 27, 2022 11:35 AM Subscribe
What are you doing to prepare for economic downturn? It looks like we're in for another spot of stormy weather with the global economy (shout out to my fellow graduates of 2008). I've been doing some research on how to prepare for a recession and would love your tips, for example, get a dental check up now, or learn to cook X cuisine. Global-filter appreciated!
- Rediscover the joys of your Local library - I recently discovered Libby; its a gamechanger
- Find a hobby that doesn't require regular spends. e.g. cycling, running, etc.
- In case you are not doing this already, cooking at home (in fact, both cooking or gardening - if you have the space for it - can be emotionally very satisfying.)
In terms of investments (and you may know this already):
- You can invest up to $10,000 per year in I-bonds through TreasuryDirect. Right now, its giving 9.62% (I think). it is one of the very few recession proof investment available at this time.
- Dollar cost averaging into your investments
- Value stocks tend to do better in recession (specially small caps) - If you invest in a broad market index, having a value accent may not be a bad idea (of course you should do your own due diligence on this)
posted by justlooking at 11:58 AM on June 27, 2022 [5 favorites]
- Find a hobby that doesn't require regular spends. e.g. cycling, running, etc.
- In case you are not doing this already, cooking at home (in fact, both cooking or gardening - if you have the space for it - can be emotionally very satisfying.)
In terms of investments (and you may know this already):
- You can invest up to $10,000 per year in I-bonds through TreasuryDirect. Right now, its giving 9.62% (I think). it is one of the very few recession proof investment available at this time.
- Dollar cost averaging into your investments
- Value stocks tend to do better in recession (specially small caps) - If you invest in a broad market index, having a value accent may not be a bad idea (of course you should do your own due diligence on this)
posted by justlooking at 11:58 AM on June 27, 2022 [5 favorites]
If you can, get a copy of The Complete Tightwad Gazette by Amy Dacyczyn.
Also, Living More with Less by Doris Longacre.
posted by FencingGal at 12:03 PM on June 27, 2022 [4 favorites]
Also, Living More with Less by Doris Longacre.
posted by FencingGal at 12:03 PM on June 27, 2022 [4 favorites]
I think it's about the same as prepping for when you think you might lose your job.
1) Make a budget, and think through your priorities. What can you cut immediately if you need to cut expenses? Now is a good time to prioritize saving and keeping money liquid.
1a) If you can afford it, start buying groceries with the intention of never running out. Buy when you have one package of noodles left, not when you run out.
2) If you haven't got it already, find a way to save up a deposit plus first and last month's rent, plus a plane ticket to where you have family, friends, or prospects. Hide this in an account nobody else knows about. It's also good to have an additional chunk of cash in small bills hidden at home where you can get to it quickly. This is called the "fuck-you fund" and you don't touch it until you need it, and if you need it, you won't have time to save up or even go get it from the bank. If you have to walk away from your house or run away from your life, this makes it possible.
3) Make sure your resume is up to date. The people who own all the jobs are going to be looking to trim down expenses, too. If your job turns out to be "essential" and stable, great! If not, be ready.
Seconding cooking for yourself, getting cheaper hobbies, and getting to know your neighbors. These are all fine ideas. Card games (without gambling) are a fun and free way to get together with people. Board games too-- even if you buy new games once in a while, you can still get a lot of use out of them.
Gardening is hit or miss for saving money. If you work together with pleasant people and whoever is in charge knows what they are doing, you can actually grow a lot of fresh food to share for cheap, and have a good time doing it. Otherwise, working alone and without a clue, you wind up growing the $64 tomato. Then again, a window box or the bottom of a milk jug with assorted baby greens is pretty foolproof (I should know, I am a fool) and a fun little project.
posted by blnkfrnk at 12:39 PM on June 27, 2022 [8 favorites]
1) Make a budget, and think through your priorities. What can you cut immediately if you need to cut expenses? Now is a good time to prioritize saving and keeping money liquid.
1a) If you can afford it, start buying groceries with the intention of never running out. Buy when you have one package of noodles left, not when you run out.
2) If you haven't got it already, find a way to save up a deposit plus first and last month's rent, plus a plane ticket to where you have family, friends, or prospects. Hide this in an account nobody else knows about. It's also good to have an additional chunk of cash in small bills hidden at home where you can get to it quickly. This is called the "fuck-you fund" and you don't touch it until you need it, and if you need it, you won't have time to save up or even go get it from the bank. If you have to walk away from your house or run away from your life, this makes it possible.
3) Make sure your resume is up to date. The people who own all the jobs are going to be looking to trim down expenses, too. If your job turns out to be "essential" and stable, great! If not, be ready.
Seconding cooking for yourself, getting cheaper hobbies, and getting to know your neighbors. These are all fine ideas. Card games (without gambling) are a fun and free way to get together with people. Board games too-- even if you buy new games once in a while, you can still get a lot of use out of them.
Gardening is hit or miss for saving money. If you work together with pleasant people and whoever is in charge knows what they are doing, you can actually grow a lot of fresh food to share for cheap, and have a good time doing it. Otherwise, working alone and without a clue, you wind up growing the $64 tomato. Then again, a window box or the bottom of a milk jug with assorted baby greens is pretty foolproof (I should know, I am a fool) and a fun little project.
posted by blnkfrnk at 12:39 PM on June 27, 2022 [8 favorites]
Build up a pantry of canned/dried goods, and learn to cook a decent tomato sauce, a lentil dahl, a basic chilli. Then if things go south, you can feed yourself, or friends and neighbours who might not be able to.
posted by essexjan at 12:40 PM on June 27, 2022 [6 favorites]
posted by essexjan at 12:40 PM on June 27, 2022 [6 favorites]
Absolutely sort out your teeth, and other near-term likely medical. In NZ hospitals are so hit by Covid they're actually saying - don't come unless you really have to.
Gardening, just start with basics pumpkins, beans, potatoes, leeks.
Work, I have deliberately set out to make me a person people need when they have a land problem, rather than just want, at least for half of my income.
posted by unearthed at 1:02 PM on June 27, 2022 [6 favorites]
Gardening, just start with basics pumpkins, beans, potatoes, leeks.
Work, I have deliberately set out to make me a person people need when they have a land problem, rather than just want, at least for half of my income.
posted by unearthed at 1:02 PM on June 27, 2022 [6 favorites]
Look at all your repeating bills and see if you can reduce or eliminate any of them (eg cellphone, netflix, internet, etc).
Especially if you have a job that may not be recession-proof, use your insurance now to get any needed health/dental/etc checkups.
Learn how to cook a few more tasty meals, especially vegetarian meals (typically much cheaper) and especially meals that are simple and tasty enough that you won't be too tempted to eat out.
Beef up your emergency fund if you think you may lose your job or some income. Put it somewhere you won't be tempted to use it unless you actually need it.
If you aren't already, track all your spending and see if there's any obvious areas you can trim without too much pain. Put the extra towards your emergency fund until it's the size you want, then investments.
posted by randomnity at 1:06 PM on June 27, 2022 [1 favorite]
Especially if you have a job that may not be recession-proof, use your insurance now to get any needed health/dental/etc checkups.
Learn how to cook a few more tasty meals, especially vegetarian meals (typically much cheaper) and especially meals that are simple and tasty enough that you won't be too tempted to eat out.
Beef up your emergency fund if you think you may lose your job or some income. Put it somewhere you won't be tempted to use it unless you actually need it.
If you aren't already, track all your spending and see if there's any obvious areas you can trim without too much pain. Put the extra towards your emergency fund until it's the size you want, then investments.
posted by randomnity at 1:06 PM on June 27, 2022 [1 favorite]
I did contract work for quite a while, and my employment was never steady. As a result, having a working cell phone was one of the most important things I could have, so that I could access resources and more employment.
1. I'd see if you can pare down your cell phone plan to the basics of what you need.
2. See if you can get on any discounted plans now, either through employment, or as a member of a club or yor profession.
3. If you're able, throw a few hundred into your cell phone account when things start looking hairy in the economy. This'll prevent it from getting shut off, when you'd need it most. It'll be active for a few months, at least.
posted by spinifex23 at 2:10 PM on June 27, 2022
1. I'd see if you can pare down your cell phone plan to the basics of what you need.
2. See if you can get on any discounted plans now, either through employment, or as a member of a club or yor profession.
3. If you're able, throw a few hundred into your cell phone account when things start looking hairy in the economy. This'll prevent it from getting shut off, when you'd need it most. It'll be active for a few months, at least.
posted by spinifex23 at 2:10 PM on June 27, 2022
Take the opportunity to learn to live a bit more simply and frugally. Bonus: it's almost always much better environmentally. Eat a little lower on the food chain with beans and pasta. Travel less, explore locally. Some people recoil at the idea of camping, but I love car-camping with my dog, getting up and making coffee at a campsite, going for relaxed hikes. The volume of used camping gear at thrift shops and yard sales is nuts. Ask around, post on Buy Nothing or freecycle, and you'll have a full set of useful gear that is barely used. Get the car maintained and hang on to it; walk and ride your bike for exercise instead of the gym. Buy Nothing groups are fantastic, as is freecycle; they save money, keep stuff out of the waste stream, and build community.
People love to hate on Goodwill, because they are an imperfect resource and because everybody thinks their donated goods are wonderful and valuable. Most of the donated goods are clothes that swamp the thrift and recycling systems. Your unsorted detritus might have a nugget or 2 of value, but Goodwill is doing you a favor by recycling your stuff as efficiently as they can, and using the money to assist the intellectually disabled, who nobody really wants to deal with. Their usefulness is huge.
I got a BYOP plan, 25/month, unlimited. Support is barely adequate, have not needed it.
"Libraries will get you through times of no money better than money will get you through times of no libraries." - Anne Herbert This cannot be emphasized enough. books, music, videos, possibly tools and art and who knows what. Lectures, art exhibits, a color printer, maybe a 3D printer.
Living Simply is a thing, I find meaning in it. I enjoy it when I get the salmon on sale, or go out to eat, get concert tickets. It's Mindful Spending, not cheapass tightwaddery, and, again, Mindless Consumerism is so bad for the Climate.
posted by theora55 at 2:25 PM on June 27, 2022 [11 favorites]
People love to hate on Goodwill, because they are an imperfect resource and because everybody thinks their donated goods are wonderful and valuable. Most of the donated goods are clothes that swamp the thrift and recycling systems. Your unsorted detritus might have a nugget or 2 of value, but Goodwill is doing you a favor by recycling your stuff as efficiently as they can, and using the money to assist the intellectually disabled, who nobody really wants to deal with. Their usefulness is huge.
I got a BYOP plan, 25/month, unlimited. Support is barely adequate, have not needed it.
"Libraries will get you through times of no money better than money will get you through times of no libraries." - Anne Herbert This cannot be emphasized enough. books, music, videos, possibly tools and art and who knows what. Lectures, art exhibits, a color printer, maybe a 3D printer.
Living Simply is a thing, I find meaning in it. I enjoy it when I get the salmon on sale, or go out to eat, get concert tickets. It's Mindful Spending, not cheapass tightwaddery, and, again, Mindless Consumerism is so bad for the Climate.
posted by theora55 at 2:25 PM on June 27, 2022 [11 favorites]
Oh - another thing!
If you have the time and energy, vonuntering is a great way to experience some events inexpensively, or even free. It's also a great way to give back to the community.
posted by spinifex23 at 2:38 PM on June 27, 2022
If you have the time and energy, vonuntering is a great way to experience some events inexpensively, or even free. It's also a great way to give back to the community.
posted by spinifex23 at 2:38 PM on June 27, 2022
My wardrobe got a bit (very) shabby over grad school + working outside, so I'm making an effort to buy quality versions of things I've worn to heck. I don't like spending the money, but I know I *really* won't want to if I'm job hunting, so may as well do it now while I have an income and some brain space.
posted by momus_window at 2:45 PM on June 27, 2022 [4 favorites]
posted by momus_window at 2:45 PM on June 27, 2022 [4 favorites]
I'm with the others who are talking about community and network.
What we are doing personally is getting out of Los Angeles. Our housing costs are unspeakable, and there is every indication here that even in a crash they won't go down, it'll just get scooped up for private equity losses and a lot of housing stock will sit empty for the tax breaks. We don't know where we're going to land yet; we're going to go explore some smaller more affordable places and try to make a decision about whether to stay where we think it's safe or go purple up someplace red. While I'd normally say major urban areas might be the smartest safest place to be if the shit hits the fan because of resources, but I don't think that's true of LA. The law enforcement situation here is increasingly terrifying, and I don't think it can be reversed - or that the oligarchs will allow it - regardless of who ends up our mayor and sheriff.
Most of the goal right now is to live lightly and save as much as we can and not get too terribly tied down until we see what happens in the 2024 elections and what happens with our jobs.
We're already pretty good at cooking, but want to get plugged in to orgs where we can learn to feed people at scale as well as preserving food. We are focusing on getting stronger - lots of walking and hiking in our future. We want to learn how to build things and make things, wiring and mechanics. This doesn't feel too much like wasted effort if things don't turn out too bad.
I am really torn just now over whether my quietest darkest fears are overreaction, but I do think some amount of hunkering down is appropriate to plan for. And yeah, get dental work while you can. Consider long-term contraception options if applicable.
posted by Lyn Never at 2:51 PM on June 27, 2022 [5 favorites]
What we are doing personally is getting out of Los Angeles. Our housing costs are unspeakable, and there is every indication here that even in a crash they won't go down, it'll just get scooped up for private equity losses and a lot of housing stock will sit empty for the tax breaks. We don't know where we're going to land yet; we're going to go explore some smaller more affordable places and try to make a decision about whether to stay where we think it's safe or go purple up someplace red. While I'd normally say major urban areas might be the smartest safest place to be if the shit hits the fan because of resources, but I don't think that's true of LA. The law enforcement situation here is increasingly terrifying, and I don't think it can be reversed - or that the oligarchs will allow it - regardless of who ends up our mayor and sheriff.
Most of the goal right now is to live lightly and save as much as we can and not get too terribly tied down until we see what happens in the 2024 elections and what happens with our jobs.
We're already pretty good at cooking, but want to get plugged in to orgs where we can learn to feed people at scale as well as preserving food. We are focusing on getting stronger - lots of walking and hiking in our future. We want to learn how to build things and make things, wiring and mechanics. This doesn't feel too much like wasted effort if things don't turn out too bad.
I am really torn just now over whether my quietest darkest fears are overreaction, but I do think some amount of hunkering down is appropriate to plan for. And yeah, get dental work while you can. Consider long-term contraception options if applicable.
posted by Lyn Never at 2:51 PM on June 27, 2022 [5 favorites]
Start cutting costs now to accumulate cash. Because of inflation this next recession could be one where extended and enhanced unemployment and other government bailout aids simply won’t come, you could need that money badly.
Think about deeply non-cyclical and counter-cyclical employment. I say “deeply” because while there won’t be many healthcare layoffs, in a non-bailout recession (think 1991 and 2001) there are lots of government and education layoffs. Counter-cyclical employment like corporate turnaround and restructuring (hi there!) is quite convenient.
Be prepared to slash expenses even further if you lose your job. Especially if you have a bedroom and transportation at your parents’ place - immediately move home. Get in a roommate if not. There are people who didn’t make those moves early in the 1991 and 2001 recessions who took many many years to dig out from the damage that did. And that was before a good chunk of jobs were remote.
Be prepared to take advantage of you keep your job. 3 year leases at steep rent discounts. Houses back at 2017 prices or cheaper. Good used cars ditto. Dollar cost average some index funds as the market pukes.
posted by MattD at 4:50 PM on June 27, 2022 [5 favorites]
Think about deeply non-cyclical and counter-cyclical employment. I say “deeply” because while there won’t be many healthcare layoffs, in a non-bailout recession (think 1991 and 2001) there are lots of government and education layoffs. Counter-cyclical employment like corporate turnaround and restructuring (hi there!) is quite convenient.
Be prepared to slash expenses even further if you lose your job. Especially if you have a bedroom and transportation at your parents’ place - immediately move home. Get in a roommate if not. There are people who didn’t make those moves early in the 1991 and 2001 recessions who took many many years to dig out from the damage that did. And that was before a good chunk of jobs were remote.
Be prepared to take advantage of you keep your job. 3 year leases at steep rent discounts. Houses back at 2017 prices or cheaper. Good used cars ditto. Dollar cost average some index funds as the market pukes.
posted by MattD at 4:50 PM on June 27, 2022 [5 favorites]
This thread is closed to new comments.
posted by Mizu at 11:51 AM on June 27, 2022 [19 favorites]