Ready For The Next Economic Bump – And For Those Who Aren’t?

So no I don’t think we really “recovered” from the Great Recession.  Some of us did.  Some of us didn’t.  Some people’s lives are getting worse.

And though I don’t expect another dot-com bubble, there’s plenty to be concerned about.  I’m concerned about student debt, about income inequality, about whatever Putin is up to in Russia, about the climate.  Narrowing this down to economic issues, we’ve got enough going on that at some point we can expect another big bump in the economic road.

Another recession.  Another thing akin to the housing market collapse if not quite as bad – general slowdown, the student loan debt issue spiking early, more middle east trouble.  There’s enough problems we can expect something.

There’s two factors to consider here.

First, we all have to be ready, because I think the next bump, the next recession is a “when” not an “if.”  There’s too many threats to economic stability to ignore, let alone the fact that there’s always cycles of up and down.  Everyone should have a plan to:

  1. Save enough money to survive a downturn (I figure minimum going six months with no salary whatsoerver).
  2. Be able to relocate if needed with relative ease if needed – or work elsewhere for awhile.
  3. Have a few branching possibilities for their life and career.

It’s not survivalism (which I don’t support, survivalism has a way of being a self-fulfilling prophecy), it’s just having that plan in your pocket just in case.  You may never need it, but having one helps.

But the other factor?

Secondly, how many people won’t have a plan for the above or can’t.

That’s actually a bigger concern.  After the Great Recession wore people out, destroyed savings, disrupted lives, I’m concerned a lot of people simply can’t survive another recession, as previous experience has left them without the savings, with debt, and with low income – an issue that has been discussed for years.  Note discussed, not much has been done.

So when we hit the next economic bump, how many people won’t be able to make it?

That’s a real issue that’s hard to plan for.  If the American economy hits a bad streak, it could devastate a lot of the population.  That may mean the next economic downturn is going to have a lot more severe consequences by the fact so many people are living less stable lives.

And . . . it’s hard to plan for that.  It’s hard to get a grasp of how bad it is for people, how vulnerable they are – and what it means for any economic downturn.  Your survival plan, my survival plan, for a recession may not be as effective when so many people’s lives become much worse. Any recession could be worse than past data predicts because our socio-economic foundations are much weaker.

It’s also a reminder that part of your life plan, your career plan, of just being a good citizen is to be aware of these issues and vote on them.

I’d still make plans for the future, to be ready for that bump.  Just remember it may be a lot bumpier, so make wise choices . . .

  • Steve

Homefinding As A Skill

Viewpoint Telescope

We’re going to have a bit of a break from geek culture and career-specific advice to focus on a life skill that’s kind of high on my list. It all has to do with the rent and living.

I just got my lease renewal – and my yearly rent increase – I had a lot to think about. Where I was living. Where I might live. Potential roommates. How the hell high was the rent going to get in Silicon Valley?*

I think about this a lot as I’m sort of an accidental expert in living in Silicon Valley. I went through a phase where various current and potential roommates kept changing, and every change meant I had to research another place to live. I ended up learning a lot about locations and economics.

Then people just kept asking me advice due to that knowledge, so now it’s kind of “my thing.”

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A Few Dollars Makes The Difference

In the Bay Area, rent and housing prices are an important topic of discussion since that’s where no small amount of your paycheck goes.  I was out recently with friends, when the subject came up, and someone mentioned a person they knew who took an insane commute so they could avoid insane rents.  They had few options.

In The Bay Area, there seem to be these weird cutoff points in rental options.  Make X amount of money and you can live in this area, but X plus even a few hundred more a month opens up new options.  As one gets more and more options, you end up almost being able to save money – because you can, say, afford an expensive apartment on public transport and ditch a car.  Or one can live near work and cut commute time – and use that to do a part-time job or run a startup.

It’s not just that you have to spend money to make money.  When you have money, sometimes you can save time and money or make more time and money.

A boss of mine once ditched her car, lived in a small studio near public transport in the expensive area of San Francisco – and came out ahead financially.  She had all of San Francisco as her playground, a great job, and plenty of options.  But ironically, to save that money she needed to make enough to live in a place where she needed less.

Respectfully,

– Steven Savage
http://www.musehack.com/
http://www.informotron.com/
http://www.seventhsanctum.com/