What to do about a recession

There’s endless talk these days about the downturn in the economy. Companies are laying off workers. Many people are looking for jobs. Others, fearing they’ll be laid off next, are downsizing vehicles and houses, and are working hard to pay off debt.

Whose fault is it?

Blame is being chucked all over the place. It’s the government, say some; Bush spent all the money on those pesky terrorists when he should have been investing at home. It is the banks, say others; they should not have loaned money to unfit borrowers. Consumers are being blamed too; if we weren’t so sure the sky was falling, we’d be spending like usual and the economy would be humming along.

How do I safeguard my family?

It is natural when you hear bad news to be more careful with your purchases, and to want to be extra-sure to provide for your family. Today I read a great post on the down–to–earth blog about home-making skills, and how they add stability to your budget, even in hard times. This makes good sense. John and I are planning on a bigger garden this year. We are buying another beef cow. We might even get a few chickens again. Anything we can make or grow or do at home will keep more dollars in our pockets.

It also makes good sense to pay off debt. An article featuring 1990’s frugal guru Amy Dacyzyn shares her spin on the current economic crisis. She emphasizes the importance of saving money, and not living beyond your means. Whether times are good or bad, these are always wise moves.

Should I stop all non-essential spending?

We were recently pushed into an unscheduled bathroom renovation by a tub flood. We wouldn’t have chosen to do it now if it were up to us. But once the bathroom was torn up, it felt like the perfect time to get a new tub as well. Some might see that as an extravagant move given these economic times. Maybe so. But between insurance and savings and a tax refund, we were fortunate that we had cash to cover it.

And an interesting thing happened as workmen trailed through our house at all hours during the past couple weeks. Man after man after man–  4 different different brisk, hardworking tradesmen– stopped to thank us, genuinely grateful for the business. They also showed up on time, worked hard, did great work, and cleaned up after themselves. Our flood was their blessing, and they made their gratitude obvious.  Meredith at Like Merchant Ships blogged similar thoughts recently. Our spending, especially when hiring small business owners, really does help the economy.

Should I buy it anyway?

Of course, wherever we are on the financial spectrum, we’d all be wise to heed this humorous video discussing the ins and outs of fiscally responsible living.