In 1995 we were being subjected to fear-mongering of all shapes and sizes. On December 31, 1999, the world as we know it would come to an end. And MRE's were sold by the ton to thousands of people in the United States. Some even stocked up on ammunition and weapons. Generators were sold and sold and sold.
We bought a generator. Where we live it came in handy during the little rainstorm called Katrina. Every now and then the power goes off and it comes in handy again. We could afford the generator when we bought it. It was not a matter of fear that prompted us to purchase it. It was a matter-of-fact decision. We did not stock up on MRE's or massive amounts of canned goods. Our propane powered generator was a wise choice and has served us well.
Our economy is in bad shape. You do not have to be a rocket scientist or a whiz-bang economist to see that. If you have studied any history at all, you will know that economic collapse, recessions and depressions have all happened before. It is cyclic and it will happen again. It will happen sooner rather than later.
You do not need a PhD in order to realize that the United States is teetering on the brink. Talk to your friends. Ask them how high their grocery bill has gotten. Ask them if they are working and if not, what are their prospects.
I heard last month that the economy is getting better and the turn-around started in July 2009. Really? I have been to Knoxville, Tennessee looking for work and it is not there. The ads for employment opportunities that used to take up pages now are listed in columns on one page. Washington, DC is better, but look at the jobs that are listed.
So what is a wise choice now? Do we simply sit on our behinds and keep watching TV or do we get off our butts and do an honest and logical assessment of our situation and do something about it?
About 8 years ago, we started in earnest to pay off all debt and put money in savings. Thus far, we are less in debt than 98% of those in the United States. We have no mortgage and no car payments. Our home is a modest size and we buy our vehicles used at a price we can pay cash for. If you get a good vehicle that needs a little work it can last you for years. Just get a good mechanic to do the work.
How do you learn to live on a reduced income? Just start living on a reduced income. If you both work, live on one income and put the rest in savings or pay off debt with it. Don't use it to live on. If you can't afford to live on one salary, cut your costs. Do without the satellite and the cable and dinner out. Repair your clothes. Learn to sew and make your own.
Is it hard? Of course it is hard. Anything worth doing is going to be difficult when you first start. Remember first grade?
It never hurts to have a little of anything set aside. Canned food, flour, sugar, a little cash, a good cookbook, yard birds (only in the country unless you can pass them off as a pet in the city), and medication if you have to have it daily are all good things to have stored away for a rainy day. It will rain. The drizzles aren't so bad but the gulley-washers can break you.
If tough times come, be prepared to lose weight. Be prepared to guard your temper. Be prepared to guard your family and to move if you have to. Always remember that the more money that you make and spend the harder it will be to survive on very little. Buy things that matter and will last. Learn some physical skills like carpentry and electrical and mechanical. If your job keeps you in the office, learn to do something that gets you good and dirty. It will come in handy.
Listen to what "they" say and decide for yourself what you need to do. It is always better to err on the side of caution.
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