How to Survive a Personal Economic Collapse

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Author of Be Ready for Anything and Bloom Where You’re Planted online course

With all that is being written about the national economic collapse, people seem to be waiting for some huge event.

However, for many North Americans, the collapse is here. This isn’t relegated to only lower-income neighborhoods. As an article from a Cincinnati news station stated, “Hunger doesn’t know a zip code.”

For many people who were formerly financially comfortable, the economic collapse has already happened, in the form of a job loss, hours that have been cut back due to Obamacare requirements for employers, an exorbitant medical bill or other crushing debt, or simply an inflation rate that has outstripped your pay increases. Despite all of the warnings, many people are still going to be absolutely blindsided.

For many families, personal finances have reached a catastrophic level – they are left to make terrible choices:

  • Which utility can I live without?
  • Should I walk away from my mortgage?
  • Should I eat something so I can work harder or should I skip meals so my kids have food?
  • Should I use the grocery money to take my child to the doctor or should I wait and hope he/she improves without medical intervention?
  • Do I risk the IRS-enforced penalties by forgoing enrollment in Obamacare or should I skip that whole grocery shopping thing so I can pay the monthly premiums and enormous deductibles in order to stay in the government’s good graces?

These are the kind of decisions that people across the nation are grappling with every day.

I’m talking about good people, hardworking men and women who have always been employed and paid their bills. A personal financial crisis does not just strike those stereotypical “welfare queens” with the long manicured nails, Gucci knock-off purse, and a grocery cart full of EBT-funded lobster.

I’m talking about the person next door, who seems to have it all together. I’m talking about that quiet family that sits two rows in front of you at church. I’m talking about that two-income family with two children and a car in the driveway that takes them to work and school 5 days a week. I’m talking about people just like you and me.

What is a personal economic collapse?

A personal economic collapse is a little different than the major crises you see all over Europe right now, where huge segments of the population can’t feed their children or stay employed. It is a crisis that just hits your family due to a given set of circumstances. (In actuality North Americans are on the brink of the kind of collapse that is occurring in Europe, but because of easy access to credit and a buy-now, pay-later society, many of us still have the appearance of prosperity.)

Here are some signs that you may be in the midst of a personal economic collapse:

  • You can only afford to pay the minimum payment on most of your bills.
  • The same dollar amount you used to spend on groceries doesn’t buy enough food to feed your family for the week.
  • You can’t afford to go to the doctor when you’re sick.
  • You are taking dangerous steps to “stretch” needed medications because you can’t afford the prescriptions.
  • Your utility bills are past due and your power is in danger of being cut off.
  • You skip meals in order to save money or to have enough food for your kids.
  • You’ve lost your job or had your hours cut.
  • You have lost property due to foreclosure or repossession (such as your home or your vehicle).

Surviving the crisis

Times are tough but you can survive this.

1.) First you have to see exactly where you are.

It’s time for a brutally honest assessment of your finances. If you use your debit card or credit card for most expenditures, you’ll easily be able to see what you’re spending and bringing in.

Print off your bank account statements for the past 2 months. On a piece of paper, track where your money is going. List the following

  • Rent/Mortgage
  • Utilities
  • Car payments
  • Vehicle operating expenses (fuel, repairs)
  • Insurances
  • Credit card and other debt payments
  • Telephone/Cell phone
  • Cable/Satellite
  • Internet
  • Extracurricular activities for the kids
  • Extracurricular activities for the adults
  • Dining out
  • Groceries
  • School expenses
  • Clothing
  • Recreational spending
  • Gifts
  • Miscellaneous (anything that doesn’t fall into the above categories gets it’s own category or goes here)

Don’t say to yourself, “Well, I usually don’t spend $400 on clothing so that isn’t realistic.” If you spent it, then it’s realistic. You are averaging together two months, which should account for those less common expenses. Brutal honesty isn’t fun, but it’s vital for this exercise.

So….what do you see when you look at your piece of paper with your average monthly expenditures for the past two months? Are there any surprises? Did you actually realize how much you’ve been spending? Most of us will immediately see places that we can trim the budget. Those $1-$5 purchases can really add up. Reining them in may just allow you to take care of an important need that you thought you could not meet.

It can’t continue like this. The economy will not withstand it. Step one is to see where you can cut things out right now from the above expenditures. Can you reduce your grocery bill? Slash meals out? Budget more carefully for gift-giving and school clothes?

2.) Rethink necessities.

If your finances are out of control, the best possible reality check is a stark look at what necessities really are. It is not necessary to life to have an iPhone, a vehicle in both stalls of your two-car garage, or for your children to all have separate bedrooms. People in Southern and Eastern Europe right now will tell you, as they scramble for food, basic over the counter medications like aspirin, and shelter, that necessities are those things essential to life:

  • Water
  • Food (and the ability to cook it)
  • Medicine and medical supplies
  • Basic hygiene supplies
  • Shelter (including sanitation, lights, heat)
  • Simple tools
  • Seeds
  • Defense Items

Absolutely everything above those basic necessities is a luxury.

So, by this definition, what luxuries do you have?

3.) Reduce your monthly output

Reduce your monthly payments by cutting frivolous expenses. Look at every single monthly payment that comes out of your bank account and slash relentlessly. Consider cutting the following:

  • Cable
  • Cell phones
  • Home phones
  • Gym memberships
  • Restaurant meals
  • Unnecessary driving
  • Entertainment such as trips to the movies, the skating rink, or the mall

4.) Waste not, want not.

We live in a disposable society. Food comes in throw-away containers. People replace things instead of repairing them. If you throw out more than a couple of bags of garbage each week, that’s a very good sign that you may be wasting resources.

Before throwing anything away, pause and think about how it might be able to be reused.

  • Food: Many times small amounts of leftovers can be recycled into a brand new meal. Meat bones can be used to make broth or stock.  Small amounts of veggies or grains can be frozen and added to a future soup or casserole. Leftovers can be frozen in meal-sized portions to take to work for a brown-bag lunch. (Learn more about repurposing leftovers HERE.)
  • Clothing: Clothing that is torn or damaged can often be repaired with only rudimentary sewing skills. If it has been outgrown or cannot be repaired, often the fabric or yarn can be reused for other purposes, from cleaning rags to fashionable accessories like scarves and headbands, or home items like throw pillows, potholders or rag rugs.  When all else fails, the fabric can be used for cleaning rags or patches to repair other items. Keep jars full of buttons, elastic, and other notions that can easily be removed before you throw a clothing item away or relegate it to the rag bag.
  • Electronics: Obviously, initially you should attempt to repair (or have repaired) electronic items that are not working. If this is not feasible, are there components of the item that can be reused, either now or in the future? What about hardware such as screws or fasteners?
  • Containers: Most food comes in a container of some sort. Before throwing the container away, consider whether or not it might be useful. Glass jars, plastic tubs, and plastic bags can often be reused to store food in your refrigerator or to contain food in brown bag lunches. Clean aluminum cans can hold all manner of items, from hardware and tools in a workshop to sewing and craft supplies. Use your imagination.

5.) Take control of your food budget.

The price of food is skyrocketing. Who hasn’t been to the grocery store recently and been shocked at the high price of that cart full of groceries or at the mysterious shrinking food packages that are the same price as yesterday’s larger ones?

  • Stockpile: Create a stockpile of nutritious, healthy staples at today’s prices to enjoy when the cost goes even higher tomorrow. (Learn how to create a frugal food stockpile HERE.)
  • Preserve: Learn to preserve food yourself when you come across a windfall.  Pressure canning, waterbath canningfreezing, and dehydrating can allow you to take advantage of great sales or end-of-season scores.
  • Eat less: This suggestion isn’t for everyone, but many of us could stand to shed a few pounds. Perhaps now would be a good time to cut back a little and shrink both your waistline and your weekly food bill. Lots of people eat for the sheer entertainment of it or out of habit. Next time you’re watching TV, grab some mending or a crossword puzzle instead of a bag of potato chips. Dish out slightly smaller servings at dinnertime to leave enough to stretch the leftovers for a brown bag meal the next day.
  • Drink water: Skip the beverages and drink water instead. At less than $1 per gallon for purchased water you simply can’t beat the price. It’s better for you, also, than sugar-y drinks. If you are lucky enough to have well water or access to spring water, your drinks don’t have to cost you a penny.
  • Focus on nutrition instead of convenience: Buy the best quality of food you can, and skip the processed, nutritionless convenience foods.
  • Grow your own. In the summer, grow the biggest garden you can. In the winter, or if you are an apartment dweller, put some sprouts and greens in a sunny windowsill to add some fresh produce for pennies.

6.) Reduce your dependence on utilities.

Energy rates are skyrocketing. As the prices begin to rise, more and more people will be unable to pay their bills and eventually their power will be shut off. Check your bill each month and as prices increase, use less power. Try some of these ideas to reduce your reliance and drop your bills.

  • Hand wash your clothing
  • Hang clothes to dry
  • Cook on a woodstove or outdoor grill
  • Can foods to preserve them instead of relying on a large chest freezer
  • Turn the heat down a few degrees and use non-grid methods to keep warm
  • Use rain barrels to collect water
  • Direct the gray water from your washing machines to reservoirs
  • Turn off the lights and open the blinds
  • Use solar lighting whenever possible

How do you intend to weather the storm?

There are bleak days ahead. Have you planned for this? What strategies do you intend to use to weather the financial crisis that is coming for all of us? What suggestions do you have for families who are undergoing their own economic collapses? Please post questions and ideas in the comments section below.

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Daisy Luther

Daisy Luther is a coffee-swigging, globe-trotting blogger. She is the founder and publisher of three websites.  1) The Organic Prepper, which is about current events, preparedness, self-reliance, and the pursuit of liberty on her website, 2)  The Frugalite, a website with thrifty tips and solutions to help people get a handle on their personal finances without feeling deprived, and 3), an aggregate site where you can find links to all the most important news for those who wish to be prepared. She is widely republished across alternative media and  Daisy is the best-selling author of 5 traditionally published books and runs a small digital publishing company with PDF guides, printables, and courses. You can find her on FacebookPinterest, Gab, MeWe, Parler, Instagram, and Twitter.

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  • A couple added suggestions for saving and not wasting:

    1. Outgrown kid’s clothes that you can’t use for future children can be traded on Craigslist.
    2. Water: if you buy bottles of water, reuse them. We refill ours with filtered water at home instead of buying them for $1 each at convenience stores.
    3. Trade. We don’t always know how to repair something, but we get together with neighbors and friends and trade labor on what we know. It helps everyone from paying for a repair man.

  • All I can say is ‘get out and vote’ in Nov 2014. Bush was bad, but not nearly this bad. Not even close.

    So if you like today and the prospects of next year, then stay home and do nothing….

      • Well Northwoods you are right.
        The voters are in the complete control of the Zombie box, so it would not even mater if there was a choice.

    • I’ve always voted, but at this point, it does not matter if you vote or not, the NWO has already decided Hillary is the Next Pres to finish their Agenda.

  • RE: “Here are some signs that you may be in the midst of a personal economic collapse”

    I’d add:
    You’re a debt donkey.
    You bought non-productive real estate prior to 1998.

    For more info on that, see:
    Specifically, check out what HousingAnalyst has to say in the comments section. Or, a couple of the others?

    If it were me, I would suggest simply walking away.
    If it were me, I would suggest Opting Out.

    Those are not popular options, though.
    Most people, it seems, have to learn The Hard Way.

    Just today I was thinking how, for the most part, the future will be a spiral down, just like the recent past was a spiral up.
    Only, the downside won’t be a comfortable illusion like the trip up was

    Cut expenses to the bone. You’re going to wish you had that money later.

    The best idea I can think of to weather the storm is to bunch up.
    The old fashioned idea of extended families living together is a time tested idea for a reason.
    Older people should pool their resources together to limit costs. A group home for pre-retirement home people is a good template. They share a kitchen, a bathroom, a water heater, a furnace, and a nurse. Such seems like it would work well for younger people too?

    And oh boy was that ‘get out and vote’ comment sad/funny. Ya know, there really is no hope for some people. We are sooo wayy beyond stopping this slow moving freight train from derailing.

    But really, the only sensible advice I’ve ever seen is, to get out of the country now. There will probably be a whole lot of us kicking ourselves later for not following that advise?

  • Finally, the TRUTH of the American condition in print!
    Thank you!!!
    People are always talking about when SHTF like it hasn’t happened yet, and for many it is happening now just as you say.

    Some additional ways to survive and stretch the pennies are…

    1. Barter and trade whatever you can, whenever you can.
    2. Shop at yard sales and thrift stores.
    3. Buy in bulk and cook from scratch.
    4. Purchase seasonal items at the end of the season for about 70% off and save them for use the next year.(Halloween costumes, Christmas gift wrap)Better yet, save and re-use gift wrap.
    5. Pick up odd jobs via Craigslist like one time events staff, moving help, seasonal labor and other part time jobs.
    6. Give home made gifts.

    • When I was young, thrift stores did not have the quality goods that they have since the “affluenza epidemic.” Yard sales changed as well. I stopped going to them when my now adult children were young as the quality of the items were…very very used. When the kids got older, the consumer mentality was in full swing. Thrift stores and yard sales became a gold mine.

      It was a great advantage to live frugally on others’ misguided concept of “the good life.” I remember purchasing a very nice gas powered lawn mower at a garage sale with the yuppie homeowner bragging that he now pays for lawn service and does not need to do it himself. Unfortunately, the good times are ending.

      • Ain’t it the sad truth?!
        I have had good luck at some thrift stores and not so much at others, just depends where you go. I have been disappointed at yard sales too, as many folks are asking store prices for used crap. Army surplus stores seem to be upping their prices too, but we do have the option of spending our money where we choose, right?
        Re-Store is another good place to check out if anybody has one in their area, they are an extension of Habitat for Humanity and sell used household fixtures, paint and building supplies.

        We do have a group that meets once in a while to do a clothing exchange and it is a good time. We gather our used clothes and other items we want to unload, meet at a park or a parking lot, open up our trunks and ‘shop’. We do a lot of barter and trade at these events, sometimes a pair of jeans is worth a jar of jelly. It can be a lot of fun, especially when we share cookies and coffee during our shopping spree.

        It’s hard times, but we can still have fun and be thankful for every small blessing.

  • I am one of those folks next door who is hard working and is facing an impending/potential job loss. I am trying to make sure I have enough supplies on hand to help us through my having to take a much lower paying job, if need be, to get us thru til I can find another job in my field…As an older adult who has been in a non-mainstream job in my field, it will be rather difficult to find a similar salaried job. But as I said, I’m not above taking a minimum wage job if I must, to help get us through. I am determined if I do lose my job, to do it on my own. My stores will help me with that, at least for a while. It will mean a major lifestyle adjustment as well, but I’m okay with that. As long as I can keep a roof over our heads, we can deal with the rest.

    • Apologies for not knowing how it all resolved, and am interested to know. I am a fairly recent subscriber to Daisy’s site, and follow your comments – therefore I know you are OK on the most fundamental level, lol! Continued best wishes to you!

  • grammyprepper’s comment got me to thinking, there are some people who say, THE Only way to get through this mess is to become an entrepreneur, or to work within the black market.
    The last Great Depression is a guide?

    Food for thought.

    Also, @Daisy, and everyone else, have you read this bit of profound truth you were Not taught in grade school?:

    The Pilgrims’ Real Thanksgiving Lesson

    • Good read, i recommend everyone read it, especially if you need confirmation that socialism will suck the life out of anything it touches

  • This is great advice for people that live in a rural or at least semi rural area.

    Sadly, those in an urban setting can do little to weather the coming shitstorm.

    I read that 30% of American families don’t even own a frying pan. It is almost too late to re-educate these people on the basics of living outside of the JIT supply lines.

    • Given enough fortitude, those living in an urban setting will be able to weather the coming super storm. It will not be fun for anyone, no matter where they live.

  • A non-negotiable for me is tithing 10% of my income back to God. Remember that 100% of it ultimately comes from Him. Even if times are tough.

  • It is a good list Daisy. My husband’s employment will be ending soon. I have been preparing where we were able, but praying, by the Grace of God.

    I thought I had a pretty inclusive list until I have came across some new-to-me information. Some of this information is from WW2 British pamphlets, but some is from other sources.


    Bring your food, such as stews, to a boil, then put it it to an insulated box and it will continue to cook. I am guessing a crock pot will financially work just as well.

    Solar ovens. I have put off trying this long enough.

    Food could finish cooking utilizing the heat from a turned off oven.


    Not all lists put clothing/footwear with the same priority as food, shelter and fuel. I was rather surprised to find out that clothing was a major problem during the Confederacy. After four years, clothing was a serious problem. By the end of WW2, Great Britain rationed practically everything, including clothing/and or fabric to make clothes, right down to how many inches and how many buttons!

    I have been rather “smug” over the years as both my husband and I have a large homestead skill base. We both felt that we could make/repair what we needed. It never connected **how much** we relied on supplies, or how quickly a situation can deteriorate. Based on the above examples, and there are certainly more, it doesn’t take much.

    Supposedly, large loads cost less than smaller loads. Air drying was assumed.

    Clothes will get clean by the agitation of the machine alone. I was skeptical about this, and took the low road when trying it. We are currently using only one tablespoon of washing powder with the fullest possible load. The agitation is set for the maximum number of minutes. We use cold water. Our clothes are clean. We must take the “plunge” and try it without laundry soap.

    In the days of yore, a laundry bat, a flat piece of wood, was used to beat the dirt out of the laundry. I understand it works, but have not tried it. It is tremendous work, but sometimes necessity is a great teacher.


    According to one pamphlet, “Don’t expect to make a success of a job by hit or miss methods.” I have been mending household items for the 30+ years I have been married. A “proper” job is always better than a job done with “a lick and a promise.” Most of my mends are clothing, toweling, utility cloths, napkins,or household “linens.” I have been called upon to repair some unusual items over the years as well 🙂

    Reinforced clothing, meaning “mending” those areas that are prone to wear, will make the garment last twice as long. They should be reinforced when they are new. I have never tried this. I will be reinforcing my husband’s socks when they are purchased new instead of after the fact. I own a darning egg.


    The grandchildren receive hand crafted items for birthdays and the Holidays. Because both of us have a large skill base, they look forward to their gifts. They also have some input. Unfortunately time is limited, so the adult children must get token gifts. No one complains. Husband and I do not exchange.

    I am still doing “research” to help with being more efficient with expenditures. Husband and I have a long way to go. 🙂

    • G ~

      I’m sorry to hear about your husband’s employment. I know you’ll do well, though – you have many skills and a great outlook.

      Best wishes to you ~


  • my eyes were opened in the 80s when on a whim Reagan stoped the roadbuilding and taxed the shortened unemployment compensation . got to work bought farming land paid it off built shelter for me and livestock. purchased tools and mainly educated myself on how to garden, milk a cow, cook, and preserve by canning ect .having modern freesers and stoves’tractors and roto tillers is great . but having a wood cooking stove and heatingstove along with horse drawn tillage tools and an old horse in the pasture just in case holds down on the stress level meat on the hoof is a renewable food sores as well as a garden . I was never caught with my pants down again, now retired living full time on the farm I sure won’t go hungry .my only worry being if my pension stops my cash income could I lose it all to an inableity to pay land taxes .like the carpet baggers of the post civil war era ;this is about all the worry I have if things really change . hope for the best prepare for the worst.

  • RE:Hording food for pennies AD

    Bet you twenty bucks it about aquaponics and for 40 or 50 bucks they’ll show you how… the info is free on the web so don’t bother, Just skip the hype and save some money!

  • This is a most excellent article. Covers a lot of territory. But something I don’t see — which IMHO should be high on the necessities list — is LIGHTING. After dark, whether finding a dropped car key or delivering a baby, lighting is super important. I suggest Googling for the book series “non-electric lighting by ron brown” (that’s me). You’ll be so glad you did.

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