How to Survive an Economic Crisis
The economy is not doing well. The Dow Jones industrial average is down 10 percent. The real estate boom has become a real estate nightmare. People either lose their homes to foreclosure or see the values of their homes drop below the balance on their mortgage. Jobs are almost impossible to find, and raises become a thing of the past. Prices go up and it's hard to pay bills. This article will show you what to do to survive an economic crisis.
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Instructions
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Diversify your portfolio. If one fund's value drops, another fund may still do well. International funds may reach new highs despite the fact that domestic funds drop 10 percent or more. If your real estate stock has plummeted, your bond funds may still increase in value.
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Safeguard your savings. Make sure your money is in a bank insured by the FDIC. If the total amount of your deposits at one financial institution is over $250,000, divide the funds between banks to meet this new requirement.
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Keep as much cash on hand as possible. If your bank goes under, it will take time for you to get your money from the FDIC.
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Save as much money as you can. If you lose your job due to cutbacks, you'll need a way to pay your bills. It could be quite some time before you find a new job.
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Find a secure job before the economy gets too bad. A secure job is one that is still needed in an economic crisis and one that will still pay well. Car salespeople may not make as much money, and waitstaff at restaurants could be let go if business suffers.
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Get rid of all unnecessary expenses. The best way to save money for rough times is to cut back on things you don't need. Purchase store brand groceries and generic drugs, get less expensive cell phone and home phone plans. Go out to eat less and watch movies at home.
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Postpone any leisure travel. If you need a vacation from work, stay at home. You can still relax and unwind. Buy yourself a hammock if the weather is warm, or purchase an inexpensive fire pit to relax in cold weather. The $200 cost for either of these items will cost much less than a $2,000 trip to Disney in Florida or a trip to Europe.
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Tips & Warnings
Avoid investing new money in the market. The market is unstable, and there is no way to know how much further it will go down before regaining ground.
Don't take all of your money out of financial markets. If you do, you won't have a chance for it to regain its current value when the stock market goes up again.
