Here’s how you can prepare yourself for it
It’s 14 years after the Great Financial Crash of 2008 and the world still hasn’t recovered. In fact, things are getting worse, not better. Some people will end up being financially devastated this year. Use the tips below to help make sure you’re not one of them.
The Great Financial Crash started the ball rolling. Then along came the greatest pandemic of our lifetimes. My mother always used to say that deaths and disasters always came in threes, now twos. If you had two, a third was sure to follow.
And, sure enough, number 3 has arrived in the shape of the war in Ukraine.
The world could barely cope with one of these, let alone three. Add into the mix the fact the governments think the only solution is to print more money, and we have the biggest economic disaster of our lifetimes staring us in the face.
Official inflation in the US is over 7%. Real inflation is around 10–15%, maybe more. The US is over $30 trillion in debt. Yes, that’s trillion, not billion or million. Think about it for a moment. That’s an average of around $85,000 for every single person in the US. There is no hope of that ever being paid back. The government will just try to inflate the problem away.
Inflation is like a hidden tax. It doesn’t show up on your payslip, but you still have to pay it.
In Europe, official inflation is over 10% in some countries. And that’s just the beginning.
In the UK, a recent survey found that 56% of people have cut back on heating, 53% have cut back on groceries, and 54% are buying fewer clothes. Others are downgrading their holiday plans and buying cheaper gifts.
2022 will see the biggest drop in living standards in the UK since 1956.
We are in a very serious financial situation. Many people still don’t realize how serious it is.
Of course, it won’t impact everyone. But it will adversely affect many millions of people.
The best time to prepare was years ago, but better late than never. Here’s what you can do it help see yourself through it relatively unscathed.
#1 — Earn more money
I realize that this is easier said than done for many people. But if you can do it you may be able to avoid all the negative consequences of what’s happening. If your monthly bills rise by $200 but you also earn an extra $200, you can live your usual life. You will barely be affected at all.
Earn more and you could end up better off than before the crisis.
Some ways to earn extra money are by working overtime at your current job, taking a second job, or starting a side hustle. Do what works best for you.
#2 — Spend less
If you can’t earn more, you’ll have to spend less. This is bound to affect your standard of living. Most people spend money on products and services that they no longer need. Cutting back on those won’t affect your standard of living too much.
The alternative is cutting back on heating and groceries, as many are already having to do.
Maybe all it takes is to cut out your vacation this year or forgo that new TV you were thinking of buying. Figure out what works best for you.
#3 — Sell some items you no longer need
I have a friend that just sold their car. They bought it secondhand a few years ago but still managed to get a higher price for it. That’s because secondhand car prices have risen massively. It’s a great time to cash in on that rise.
Not everyone needs a car. Yes, it may be nice to have, but is it necessary? Only you can decide that. Surely heating and groceries should be your priority. Selling his car worked for my friend. It may also work for you.
#4 — Cancel subscriptions that you no longer use
Many people have monthly subscriptions for services that they no longer use. Go through your credit card and bank statements to see if you have any. Also check your PayPal account, as you may have some recurring payments there as well.
#5 — Cancel your gym membership
Instead of paying to join a gym, why not work out at home or in your local park. You don’t need fancy equipment to stay fit and healthy. Bodyweight exercises are very effective and can be done almost anywhere. You also save money by not having to travel back and forth to the gym.
You could also get a group of friends together and do some outdoor exercises.