I’ve been hearing more and more about a recession coming, probably next year, while others are speculating we may be going into another great depression. These terms can sound very scary, especially to a younger generation who have never dealt with anything like this or have much knowledge about either.
So, with a recession coming, and perhaps another great depression, what does this mean for us and what can we do to prepare our families and finances?
As a homemaker, our duty is to the home. And that means doing our best to eliminate excess spending, waste, and ensure our family has things they need to thrive. When things get tough, it is our time to thrive and shine for our spouse and children. But before we get to that, let’s start at the beginning.
What Is A Recession?
According to Forbes a recession is:
“…a significant decline in economic activity that lasts for months or even years.”
During that time a country will see:
“…negative gross domestic product, rising levels of unemployment, falling retail sales, and contracting measures of income and manufacturing for an extended period of time.”
You’ll often see a recession after high unchecked inflation, kind of like what we’re seeing today.
When Was The Last Recession?
The last recession took place between December 2007 and June 2009. Many people will remember this because of the housing crash and the US government for some reason bailing out the companies that caused the crashes in the first place. ( I understand they did it to help stabilize the economy, but I recall the bail-out was HIGHLY controversial at the time.)
This was considered a “Great Recession” and was the second worst economic decline in United States history.
A few things caused the Great Recession of 2008:
- Allowing banks and brokerages to grow “too big to fail” was a problem.
- Immoderate spending and taking on excessive debt.
- Loose lending and approving as many loans as the bank could, including to those with poor credit.
- Adjustable rate mortgages that started low and went high the years following on top of giving loans to those with poor credit were a contributor.
- Wall Street was engaging in riskier behavior that created a domino effect in the collapse of the housing market.
- Then the stock market crashed.
I’m sure there are a few things I forget, but it was a period of optimistic growth, overspending, corporations and banks taking advantage, a great collapse, and then the bail out.
We Are Headed Into A Recession
According to Fortune.com there is a 50/50 possibility of a recession in 2022, though they predict that a recession is more likely in 2023. Places like Forbes also believe this as well.
However, I’ve heard many people, including some financial institutes like foreign banks, say we are headed into a recession, and it may be worse than expected.
A Great Depression
Economists have theorized that we’d see another Great Depression in the 2030’s. Is it possible we could see one earlier? Before you panic, let’s look at what a Great Depression is.
What Is A Great Depression?
A depression is a long and severe recession in an economy or market according to a quick Google search.
The Great Depression of The Early to Mid 1900s
We have all learned about the Great Depression in American history. It began in 1929 and didn’t end until 1939.
The stock market crashed in 1929, a time where many people including every day Joe’s used the stock market. Due to that, bad government policies, and the bank failing due to panic caused the collapse of the money supply.
The Smoot-Hawley Tariff also created a bigger financial rift and then we cannot forget about severe drought conditions. Year long droughts followed with bad farming practices that didn’t preserve the soil created “The Dust Bowl”. Massive dust storms then choked out crops, livestock, and even people.
What Would A Modern Great Depression Look Like?
When we think of a Depression, that is what we think of. But a modern Great Depression may look different.
People would be driving less, spending less, going out less, staying in more. Due to the lack of spending there is a chance the unemployment rate will go up. Due to that people will have a rough time paying bills, mortgages, buying things in general. In 2009 the unemployment rate was up by 10%.
However, due to the global economy being a mess because of massive shut downs, food plant fires, animals mysteriously dying, and the severe drought in the west, among other things, there will probably still be shortages.
But, during recessions generally prices come down. Most prices tend to plummet.
Preparing Your Family For A Great Recession or Great Depression
Regardless if we go into a recession or a depression, things are rough, and things will continue to get rough, but there are things we can do to help prepare our families and homes for this tumultuous economy.
These things are:
1. Make sure you have a secure income.
This means taking time to build skills to get an “essential job”. Everyone is important, however, jobs like teachers, police, nurses, and repairmen are more essential that a burger flipper. Not that there isn’t anything wrong, but your job is not as secure.
2. Get rid of your debt!
A lot of us rack up debt whether it was in college, trade school, loans, or credit cards. Start paying off the debt that you can. When a recession hits, you may face losing your job or extra income, then debt piles up and becomes a problem.
3. Live beneath your means.
Many people live above their means. They live paycheck to paycheck because they love big houses, subscriptions to everything, newest and shinier items. Not everyone, some people do live paycheck to paycheck, but it’s time to start dwindling down and living beneath your means. That will open up money. $100 is a lot when you’re needing groceries or gas or need to pay the water bill.
4. Reduce Spending
This one many of us could benefit from. Stop buying excess. Many of us waste groceries. Eat out less, drink your coffee at home. Everyone laughs at that one, but at Starbucks, all those frilly coffees add up especially if you’re drinking one almost everyday. Even at 4-5 dollars a pop, if you drink one half the month that’s $60-$75 a month.
5. Build up your savings.
It’s important to have a safety net if you can, but during a depression you may need that extra money. You should try to have at least 3 months worth of money saved up. I learned that from Dave Ramsey and have lived by it. Even if you don’t lose your job, sometimes emergencies happen and you’ll be happy you have it.
6. Grow your knowledge.
When the economy is rough, sometimes you gotta save money. To do that sometimes you have to learn to do stuff yourself, especially when the economy is a mess and there are shortages. This includes learning to:
- Budget
- Manage Money
- Reuse and recycle
- Garden
- Farm
- Hunt/Fish
- Preserve Food and Stock Food
- Build Community Bonds
Times Like This Are Where Homemakers Shine The Most
Times like these are where homemakers can shine. It took me a while to come to this realization, so bare with me. With the insane inflation we’re dealing with now, I considered getting a second job to help us put more money away and ease the pressure of the inflation.
My husband was against this, so I took time to pray and think about ways I can help and ways other stay at home mom’s and homemakers can thrive.
That list above, is key to dealing with any economic disaster. And they can earn you some money to help as well.
I follow so many thriving farmers, homesteaders, and even urban farmers on Youtube and Tiktok who are sharing their mistakes, successes, and teaching others.
Learn some key life skills and share what you know. Not only will you be able to secure your family, teach others, but you can sell those products and skills or barter.
I’ve talked to people where we agreed to trade vegetables for honey, eggs for babysitting, etc.
Socialize with friends and learn these skills together! It’s a great way to bond and help ensure loved ones will be able to take care of their families in times that most of us have never experienced or have not experienced in a long time.
A Great Recession/Depression Is Not A Time To Panic
This isn’t the time to panic. It’s a time to evaluate how you and your family are spending money, what skills you need to learn, what products you need to stock up on. But don’t worry, everything will work out in the end.
“Therefore I say unto you, Take no thought for your life, what ye shall eat, or what ye shall drink; nor yet for your body, what ye shall put on. Is not the life more than meat, and the body than raiment?
Behold the fowls of the air: for they sow not, neither do they reap, nor gather into barns; yet your heavenly Father feedeth them. Are ye not much better than they?
Which of you by taking thought can add one cubit unto his stature?
And why take ye thought for raiment? Consider the lilies of the field, how they grow; they toil not, neither do they spin:
And yet I say unto you, That even Solomon in all his glory was not arrayed like one of these.
Wherefore, if God so clothe the grass of the field, which to day is, and to morrow is cast into the oven, shall he not much more clothe you, O ye of little faith?
Therefore take no thought, saying, What shall we eat? or, What shall we drink? or, Wherewithal shall we be clothed?
(For after all these things do the Gentiles seek:) for your heavenly Father knoweth that ye have need of all these things.
But seek ye first the kingdom of God, and his righteousness; and all these things shall be added unto you.
Take therefore no thought for the morrow: for the morrow shall take thought for the things of itself. Sufficient unto the day is the evil thereof.”