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by mr_gibbins 1497 days ago
All of this is the opposite of what the government will want you to do, since (arguably) the best way out of a recession is to spend one's way out, but, tragedy of the commons aside:

- Get rid of debt, right now. Interest rates are skyrocketing and unsecured debt is the last thing you need. Restructure it, consolidate it, pay it, but get rid ASAP.

- Emergency fund. Cash is good, but inflation depreciates it and it's too easy to spend. Buy precious metals (gold can be bought by the gram, you don't need to be rich already) or some other reasonably stable store of value that tracks inflation long-term.

- Trim the sails on your unnecessary spending - not all, but some. Try and have something left at the end of every month.

- It's musical chairs time for jobs. Find a comfortable job at the highest pay you can muster that has long-term stability, best measured by longevity and number of employees. Now is not the time to join a funky equity-paid two-man startup.

- Fill the cupboards with tinned and dry foods. Perhaps not in the US (you guys are fairly self-sufficient) but in Europe we're already seeing gaps on the shelves, not least because of the blockades in Ukraine, rising cost of transportation, Brexit and so on.

- Fill some fuel cans if possible (store them OUTSIDE), fuel prices are unpredictable at best, at worst there will be shortages.

- Try not to read too much news. Walk the dog. Focus on your family.

3 comments

I’m afraid that storing fuel doesn’t work like that, especially if you leave it outside. You’ll get back to a can of varnish by the time it makes any difference
That's good to know (no sarcasm intended) - I was intending on holding onto my modest stash of diesel for a few months at most, but probably worth finding out a bit about how quickly it goes off!
Yeah, fuel degrades over time. There are different numbers out there. Exxon [1] says up to six months. "In general, gasoline should be used within a month of purchase. When the engine will not be used for an extended period of time, it’s best to drain the fuel tank and then run the engine until it stalls. If you choose to store gasoline and follow proper storage guidelines, the gasoline can be expected to remain of good quality for at least six months."

https://www.exxon.com/en/gasoline-safety-storage

While I'm sure this is good advice, anecdotally I filled up a car with gas just as lockdown started, and then didn't use that car much for the next two years. Still seemed to run fine when I sold it this year.

More: this was a 1997 car with gas not diesel.

Diesel goes off fairly slowly. One year old diesel can be put into any modern car. Two year old diesel can be mixed 50/50 with fresh diesel and put into a modern car 10+ year old diesel can go into a tractor or an old (pre 2005) diesel car.
Water ingress into stored diesel is calamitous. See also ‘diesel bug’.
Yeah, algae growth in diesel fuel can be even more catastrophic than putting stale gasoline into a fuel system. It can infect the rest of the system. A family member is a farmer, and 3 years ago had a semi develop algae growth in the fuel system. The tank needed to be removed and power washed, the entire fuel system needed to be extensively flushed. This ended up costing thousands.

In general, I wouldn't recommend storing fuel for the average person beyond a gallon for lawnmowers. It isn't worth the safety hazard, and the only way to actually save money is if you are using & purchasing enough that you can contract your fuel purchase (sign a contract to purchase $x by y date) for bulk delivery.

Why getting rid of debt ? I think that if your job is secure then on the contrary it seems like the perfect time to borrow as much as you can at fixed rates to benefit from inflation..
I was writing from the perspective of the debt-holder, that if you have expensive unsecured debt (and many poorer householders do), then as bills rise there is less disposable income to work with, debt payments eat a larger portion of outgoings and consequently is detrimental to quality of life.

If debt is not at a fixed interest rate then there's also the risk of interest rates going up, which we're seeing now. Theoretically a recession might help cap that, but it's a big gamble - an interest rate rise of, say, 5% would see an incredible amount of foreclosures. In the UK in the 80s, the interest rate topped 18% during a major recession and period of intense civil unrest.

Seems counterintuitive but those are all things people should do when things are going smoothly. Now would be the time to take calculated risks, bet on a few horses and lean on savings etc. if necessary. Now would be the time for courage and a sharp view. There will be stronger things that emerge, that’s where you want to be.