The United States might be on the verge of another collapse that is potentially more devastating than those in 2007 and 2008. This isn’t the opinion of survivalists, but the opinion of executives at the world’s largest retailer, Walmart. Internal emails leaked to Bloomberg News  indicate that some Walmart executives think an economic collapse is under way.
In the emails, Walmart’s vice president of finance and logistics, Jerry Murray, called February sales a total disaster and the worst he’s ever seen. Another Walmart vice president, Cameron Geiger, even asked, “Where are all the customers? And where’s their money?”
We should worry about this because Walmart’s sales are a direct indication of the nation’s economic health. They show how real people in the real world are doing. The data available to Walmart executives indicates that the economy is sputtering to a halt.
Media accounts try to blame the payroll tax increase that started in January for the collapse in Walmart’s sales. There seems to be more to it than that, however; average people have suddenly stopped spending money. Even with higher taxes, average people still need to buy things like food and dish soap. Why aren’t they buying? The most likely answer is that they don’t have the money.
What You Can Do To Protect Yourself And Your Family
So what can you do to protect your family if another collapse is beginning? The first and most important thing to do is not panic. Instead, assess your situation and see what tools you have for survival.
The first and most important thing you need is cash. This doesn’t have to be bills under the mattress; it means money you can easily access. Make sure you have a large sum of cash in a savings account or a CD. Also make sure that you have some mechanism that enables you to access that cash quickly, namely a debit card or credit card. This way, you can make purchases with that money and take cash from ATMs if necessary.
The second thing you need to do is to stockpile food and other necessities. This doesn’t mean just survival food; it means the stuff you use every day. Do you have enough extra food and other necessities—things like laundry detergent and toilet paper—saved up for your family to live on for a few weeks or a month?
The third step that you must take is to reduce your spending as much as possible. One way to do this is to set a goal of cutting spending, such as reducing your monthly spending by 10 percent. Try to cut out as many luxuries and creature comforts as possible, and cut your grocery bill. In particular, cut back on driving as much as possible.
The fourth step is to increase your savings now. Start putting as much money as possible into your savings or CD. Take the extra cash from reduced spending and put it into savings.
The fifth step is to reduce your debt as much as possible. One of the first debts to eliminate are your car payments; try and eliminate your car payments so your family will have lien-free transportation in an emergency. Once the car is paid off, pay down high-interest debts such as credit cards. Debt reduction is the best way the average family can free up extra cash in the near future.
The sixth step you need to take is to develop alternative sources of income to your job or jobs. The last downturn showed us that jobs can disappear almost instantly, so having other employment option is critical. Recent events have shown that government programs, such as unemployment insurance and food stamps, might not be available in the near future. Look for other means of generating income, such as small businesses, rental properties, online businesses, freelancing, and part-time jobs. Even if you only make a little money, it is better than no money.
The seventh step is to be as self-sufficient as possible. Try such steps as growing your own vegetables, generating your own electricity, relying on a bicycle instead of car for transportation, and so on. The more you can produce yourself, the less money your family will need to spend to survive.
Don’t Neglect Bartering
Those without money can resort to plain old-fashioned bartering. If you grow a garden, you might be able to trade fresh produce for items your neighbor owns or services your family needs. This has worked before during the Great Depression; my grandfather survived by repairing watches in a small town in Virginia. The local farmers often paid him with food rather than money.
If you have a skill such as car repair, hairstyling, nursing, tax preparation, etc., you might be able to trade it for items you need or can sell more easily. Take an inventory of the skills you have, and see what you can use.
Financial Downturns Can Equal Opportunity
An economic collapse can be an opportunity for those that have cash and brains. Valuable investments, such as real estate, stocks, precious metals, antiques, and collectibles, often sell for a fraction of their worth after a downturn. Remember how little real estate in Florida was selling for in 2009? Those with cash can pick up some terrific bargains in such a situation.
If you play your cards right, you might better your family’s position during a collapse. If real estate prices collapse, you might be able to pick up a home at a much lower price. You might also be able to buy rental property or houses you can fix up and resell at a lower price.
If you can’t afford real estate, there are other opportunities out there. If the stock market collapses again, you might be able to pick up valuable shares at a fraction of the price. If you don’t trust stocks, try going shopping for items such as collectibles, antiques, guns, gold coins, tools, etc. when the collapse comes. Those are often sold at a low price in desperate times.
Be Flexible And Think The Unthinkable
The key to survival, especially economic survival, is flexibility, so if you want to get your family through an economic collapse, you will have to be flexible and creative. Those who are willing to adapt to changing times will survive and thrive, and those that don’t will suffer.
The way to become flexible is to start thinking about the unthinkable. Ask yourself, how will I make a living and support my family if my job disappears and there’s no unemployment insurance? The best way to answer that question is to start thinking about it.