For years, ITR Economics has been forecasting that a second Great Depression will define the 2030s. While ITR helps businesses reduce risk and make profitable decisions, we are also here to help individuals through difficult economic times. The prospect of a 2030s Great Depression may seem scary, but there are many things you can do now to prepare for it.
Tips for Younger Generations
The best thing anyone – including those of younger generations – can do to prepare for the 2030s Great Depression is invest, invest, invest. Invest as much as possible. While it may be challenging in times of economic hardship, shrewd financial preparation is your best avenue for prospering through the next Great Depression.
Minimize your debt heading into 2030. Consider a 20-year fixed-rate mortgage, eschew credit cards and other debt-incurring payment vehicles when possible, and pay off your vehicle and other loans by 2030.
For those going into college or who have children going into college: it is best to try to pursue a career in a promising industry. Education, government, technology, and health care are a few that will offer more opportunity heading into the second Great Depression.
Starting higher education at a community college and then transferring to an in-state college is also an extremely cost-effective route to take. Out-of-state colleges will be the most expensive, and the long-term earning power gained may not be enough to justify the debt that will accrue.
[ Further Reading: Five Ways Kids Can Prepare for the Great Depression of the 2030s ]
Tips for Older Generations
There are certain actions that people of older generations should be taking in any case, regardless of the upcoming second Great Depression.
Think about where you have your retirement funds. If they are in certain types of accounts, you will be paying taxes every time you withdraw. With an account such as a Roth IRA, however, you will ultimately retain more of your money, as it is taxed only when you deposit it.
It is also important to be aware that Social Security is headed toward bankruptcy in the second Great Depression. Bankruptcy does not mean there won’t be a check coming; it means there will be a reduction in the amount.
If you are still working and your Social Security check gets cut by 20%, that is an irritation. If you are dependent on Social Security as your main source of income, however, a 20% reduction can be a crisis.
Tips for Families
The most important thing families can do leading up to the 2030s Great Depression is learn how to live a simpler life in order to save money. You and your children will have to try to live without having the latest and greatest possessions at home. Although that is easier said than done, a lot of Americans will need to live that way to best make it through the Great Depression.
This does not mean that you cannot still go on vacations with your loved ones, or go out to fancy dinners on occasion. The key is to scale back such splurges; make them less frequent.
During the Great Depression, we will see more extended families living together in the same household; grandparents may have to move in with their children. While not ideal for most, it is certainly a bearable situation.
That being said, try to stay in the same house throughout the Great Depression. It would be unwise to add the unnecessary burden of additional debt with something like a new, more expensive mortgage.
The upcoming Great Depression of the 2030s will be a difficult period, but there are many things you can do now to prepare for what’s to come. While ITR Economics is a business-focused economics firm, we are also here to help you, the individual, be ready for any economic obstacles ahead.
