Are You Ready For Hurricane ED?

Image by ((april)) via Flickr

Tonight is a "Jamaica" post. So, apologies to my overseas readers if you don't think it's relevant. It's about tips for surviving an economic downturn, so you might want to have a quick read.

This is what we are facing:

• job losses, wage freezes etc.
• accelerated depreciation that the country's leadership is now working to slow in a structured manner
• high interest rates
• electricity rates have been increased because of the accelerated depreciation
• the government is reported to be considering - I repeat, just reported to be considering because there is no decision or even confirmation that they are actually considering - increasing GCT and adding a gas tax, but considering coupling that with lowering income tax

Let me translate this:

• The light bill is going up - again. And oil prices are still low.

• Anything you normally buy is going up because we are an import economy - so between the depreciation and the high interest rates, businesses are passing on their increased costs to you. Don't get mad, that's what businesses do. And if they have higher costs, they have to pass on at least some portion of them.

• Other than inflation eating away at your hard earned money, your disposable income is going down if there are no or limited wage increases.

• In the midst of it all, no jobs are guaranteed.

• Taxes, albeit hypothetical, increase your costs - of gas and all consumables. But hopefully, you get more income if income taxes are reduced. But it would have to be a big enough reduction to cover the increased cost of living to really make a difference.
  

So, what am I doing? I'm hunkering down like we do during hurricane season. You know, you get a bulletin, it may not hit, but you have stocked up and locked up tight just in case.

Well, let's call this one Hurricane Economic Downturn (Hurricane ED for short). And Hurricane ED has taken the world by storm. Some countries are hurt more than others, and are still getting battered.

Despite what you may think, we haven't been hit yet; we're feeling the outer bands. Look around the world and you'll see that this is true. Now, we can be spared a direct hit. Or we can get a hit - direct or otherwise. But, like all hurricanes, if you are prepared, the more prepared you are, the quicker you can recover.

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My top three Hurricane ED Preparation and Survival Tips?

1. Save save save. Expenses are increasing outside of your control. Setting aside more money to be able to meet these expenses is the smartest thing you could do. Everybody should normally have an "Emergency Fund". This is a money management basic. If you don't have an "Emergency Fund", start one. If you do have an "Emergency Fund", pump it up.

2. Budget and stick to it. If you budget, look at it again. And be realistic with the expenses (they are going up) and your inflows (they are flat at best). Not only look at it in terms of cost increases, but look at what can be cut. You don't have to turn your life around in a panic, but remember we talked about seriously reducing electricity consumption, for example? Reducing Bills! - Electricity Bills! Phone Biils! Water Bills! That might be a good place to start.

3. Seriously evaluate debt before you take it on. This is important. General living expenses are going up. Taking on debt makes it even more difficult for you to meet expenses.

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Now, we know how to prepare for and ride through hurricanes. This is really not that different.

• We have to plan.
  
• We have to act.
  
• And we have to help each other.
  

We have done it time and time again.....and it's time to do it now.