How to Protect Yourself in The Great Depression

Do the current signs of The Great Depression have you worried? Are you trying to figure out how to protect yourself if the financial system crashes? Here are some things you can do.

The first thing you need to understand is what the word 'economics' means in terms of thinking about your personal or company finances, and how you can use what it means to your financial advantage.

Don't pay attention to what the media says about 'economics' when they talk about the ups and downs of the stock market, product shortages and demand increases, rising prices, banking industry mortgage defaults and the unemployment figures. Those are 'economic representatives' that evaluate an area much larger than you can control.

What you can control is your own business and household economics. The definition of the word economics I am using is the original one; meaning 'the art or science of managing a household or business.' And those are things that you, as an individual, can control.

There is an art to managing a business or household. It requires certain skills and abilities, like putting in organization so things run better. There is a science of managing a business or household, especially in the money area. Here are some things that you can do to make sure that the economics of your business or household are stable and strong, despite the fact the general economy may be on the slippery slide to disaster.

1 - Use Cash Not Credit

Each time you make a purchase using lines of credit or credit cards that you cannot pay off as soon as the statement arrives, you are committing your future earnings to the the credit card company. That future income will undoubtedly be needed to pay your regular business or household expenses. That is committing yourself into the hands of an economic slavemaster called the credit card trap. The exception is purchasing property that increases in value, like investing in some commercial property or buying a second home that you use to increase your income from rents collected. It's plain smart money management to use your money to earn even more money.

Tip: Be sure you negotiate a big discount when you pay with cash. When the rest of the world is on the downhill run to economic disaster and credit is difficult to obtain, the person who has the cash is king. Another item worth a mention is, work out how to purchase items wholesale instead of paying retail prices to lower your cost even more.

2 - Don't Spend More Than You Earn

Learn from your grandparents or parents who made very little, but lived well. Reduce expenses to less than you earn. The fastest road to disaster in the finance area is spending more than you make. It's possible to keep a good quality of life while eliminating optional spending. This can be done by acts such as buying used equipment rather than new, and eating less often in restaurants. Don't buy something because you only want it, but don't really need it. It's just a plain good money management practice.

3 - Make It Before You Spend It

When there is an expensive item you need to purchase in the future, begin by setting aside small amounts of cash in a savings account for that purchase and don't stop until you can pay for it with cash. On a household level, if you have 10 years before your child enters college, then work out how much the tuition costs will be and figure out how much cashyou have to set aside every week to have the full amount the year they graduate from high school. Plus apply for every student scholarship, grant or financial aid package you can locate. On a company level, if you need to upgrade or buy some furnishings or equipment for your business , then work out how much the cost of that will be and figure out how much cashyou have to set aside every week to have the full amount just before you will need to make that purchase. Plus look for every place you can locate to get the lowest cost possible. 4 - Sest Aside Some Savings for Emergencies and Operating Expenses

Nothing will make you sleep better at night than the financial freedom of having some cash stashed away in savings for emergencies like needing to repair the car or an office machine, having to have some unexpected dental work or losing a job. When you have a cushion of cash you can immediately use, then magically, you stop worrying about money, and your attention goes back on living life and enjoying it, and making money suddenly gets easier.

The only thing you have to be afraid of in a great depression is not having a cash cushion sitting in a savings plan you can get your hands on at a moments notice. It might interest you to know that the Great Depression in our recent past created more millionaires in the U.S. than at any other time in history. How was that possible? During those years, the economy crashed, the stock market crashed, inflation took prices of everything through the roof, unemployment figures skyrocketed as companys shut down, and individuals who lost their jobs also lost their homes.

The people who had cash stashed away were able to buy homes, property and entire companies for pennies on the dollar. Those individuals became overnight millionaires due to the fact that they had the cash to survive the disaster called The Great Depression.

From every dime you earn, immediately set aside 10% and stash it in an interest bearing account that you have designated for your cash cushion. Even if you have to work an extra job and cut expenses on top of that to build your cushion of cash. No moaning, groaning and saying you can't, JUST DO IT! As the weeks and months roll by you'll find you are sleeping better and are walking through life with greater confidence knowing you are controlling your financial destiny and have protected yourself from The Great Depression looming on the horizon.

Why is controlling the flow of your money so important? It is the energy and life blood of a business or household. It is necessary to pump some of it through the income producingareas first to keep it running smoothly, and also to set aside some of it for future survival. Everything runs smoother when enoughcash is available. Our Money Management Software guides you towards making the most advantageous decisions of how to use your income to generate more profits and build wealth.