(ModernSurvival.org) – How Can You Maintain an Income in an Unstable Economy?
- Diversify Work
- Use Credit Cards
- Work More Hours
- Downsize
Answer: Diversify Your Work. Here’s why…
The potential for an economic crash is ever-present. In fact, the idea of a crashing economy is the reason many people choose to become preppers — they know another Great Depression is a real possibility. Thankfully, not every recession or economic slowdown will be catastrophic, but it could hit a person’s bank account.
Increases in gas, food, and housing prices can cripple families who live paycheck to paycheck. So how can one prepare for economic upheaval and preserve their income in an unstable economy?
Diversify Income
Even for those who have full-time employment, having a second, third, or even fourth source of income is recommended. For starters, diversified income acts as a safety net in case one source is extinguished. Getting laid off or falling ill (or even facing a pandemic lockdown) won’t be as damaging if more than one stream of revenue flows into the home.
Setting up passive income is one of the best ways of diversifying because these sources make money constantly (even while the owner is sleeping). Examples of passive income include royalties, rental properties, and investment income. Of course, not everyone has the cash necessary to start a passive income.
Arguably, the best way to begin diversifying income is by finding ways to cash in on preexisting hobbies. Turning a hobby into a moneymaker brings more money in and is also a pleasant way to make extra cash. Selling artwork on Etsy or collectibles on eBay are both viable options.
Live Within Your Means
By living within one’s means while times are good, they’re less likely to go into debt when prices begin to rise. Remember that debt tends to spiral out of control when it cannot be paid off quickly, especially concerning credit cards. By living on the bare minimum before a recession, one should be able to prepare a sizable emergency fund. Even if the economy doesn’t crash, savings can go toward retirement.
This concept can be taken to another degree for married couples by attempting to live off one spouse’s income while saving everything the other makes. It is shocking how quickly a sizable nest egg can be created using this method.
Create an Emergency Account
Setting up an account solely for saving money for an emergency is recommended. This account will act as insurance should one face a sudden job loss, expensive repair, or similar issue. An emergency fund will allow for continued survival — and prevent borrowing or using credit cards (which build interest faster than many realize).
Sudden job loss, illness, or disabilities can strike without warning, which is why it’s so important to prepare now. Unfortunately, these aren’t the only types of disastrous events that can hit out of nowhere. To learn more about why it is vital to be prepared for anything, check out our article on black swan events.
~Here’s to Your Survival!
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