Lots of headlines are popping up predicting a US or global recession. I don’t claim to understand economic theory at more than a basic level – I took a few economics classes in college and manage our family investments, but that’s about it. We might go into a recession this year (my guess) or we might not. Either way, it is a fine time to re-examine how it would impact you.
Don’t count on the media to help you figure out what to do. On the one hand, there are lots of articles about stimulating spending in order to avoid recession, including giving people money in the hope that they spend it quickly and NOT use it to pay down debt. Yet personal advice columns are exhorting individuals to examine their spending carefully and reduce their debt, warning of job losses in a recession. So what should you do? Don’t be fooled by any rhetoric that you should feel good about spending because it “helps the economy” even if it puts you into debt that you might not be able to manage if things go south. The economy exists to serve you, and not the other way around – it isn’t some separate thing that we need to feed at our own expense. Spend money only if it is good for you. Decouple your spending from your earnings as much as you can so that the volatility and uncertainty in the world, which you can’t control, will not yank you back and forth as it rises and falls. I wouldn’t be foolish enough to say that a recession won’t hurt many people even if they have stripped their consumption to the bone, but hopefully living below one’s means whenever possible will limit the pain.
There is no better time to be a minimalist than right now – and that is always true, whether a recession is looming or not. If you’re personally at risk in a recession, learning what is essential to your happiness will help you through any bad times to come, whether they happen this year or a decade from now.
So, TGIAM – Thank Goodness I’m (attempting to be) A Minimalist.