How to Prepare for Economic Collapse

Prepping for Economic Collapse - Warning Signs, Stages, How to Be Ready

The world is yet to see a wide scale economic collapse or global recession. However many countries have faced this. Some prominent recessions in history include:

  • 07,08 Financial Crisis
  • Great Depression

And most recently the COVID Recession and now the current states of Cuba and Venezuela in 2021.

Many do not foresee these financial crises and thus are not prepared. Economic collapse are events that happen time and time again, with the next one very likely being worse than the last.

This guide will provide information on what economic and financial collapse is, warning signs and easy tips and strategies on how you can be prepared.

What is Economic Collapse?

An economic or financial collapse is a breakdown of an economy as a result of a crisis. These triggering events are usually debt or currency crises, crashes of the stock market or events like war.

Debt crisis: this is when a government takes upon a sovereign debt and is unable to pay it back.

Currency crisis: significant decrease in value of a currency 

What Will Likely Happen in a Financial Crisis

Mass Bank Runs

Everyone will be heading to the banks to withdraw funds. The banks will face default as their reserves are used up due to only holding a small proportion of cash on hand. This method used by the banks is called fractional reserve banking. 

Crash of the Financial Systems

This will be characterized by the stock market crashing as traders will be selling stocks in large quantities to recover money. Asset valuations will plunge and high inflation (and potentially hyperinflation). Hyperinflation is caused by injection of more funds into the economy such as the government printing money to cover budget deficit, which decreases the value of the currency and skyrockets prices.

Descent into Chaos

Ultimately the banks will not have enough funds for everyone to withdraw money and this is when chaos will ensue. Lawlessness will take over, people will be out rioting in the streets and looting and violence will be widespread. 

  1. Martial Law will likely come into place

Martial Law or a state of emergency will come into place. All existing laws will be suspended and the military will take over. Martial law will likely entail curfews, movement and travel restrictions and the abolishment of the constitution. 

Warning Signs Financial Collapse is Upon Us

Unemployment Rates

When the economy is slow, businesses begin to prepare for the future. The first thing they cut is employees. Keep an eye on unemployment rates as a spike could be a sign of financial collapse.

Low Consumer Confidence

In the periods leading up to an economic collapse, consumer confidence and spending is low as a result of financial stress.

Inflation on the Up

If inflation increases and prices of goods and services increase quickly, the Federal Reserve will step in and increase interest rates to combat this. Higher interest rates on the other hand will discourage people and businesses from borrowing, which will stunt the economy’s growth

How to Prepare Yourself for Economic Collapse

1. Safeguard Your Finances!

Cash at the Ready

Cash is everything during an economic collapse as it will afford you with buying power that others may not have. It is paramount to have cash, both in-hand and in an account that can be withdrawn quickly if needed. You do not want to have large amounts of cash tied up in investments that will take a long period of time to liquidate should you have to.

Having an emergency stash on hand is very important. Setting aside an amount of cash that can be used in emergencies should income run dry and an economic collapse ensue, will provide you and your family with some security. Keep this money in an envelope or in a safe.

Cut Down On Your Expenses

The lower your expenses are the more funds you will have at your disposal in a disaster. It is common that we all have unnecessary expenses. Get together a list of your expenses and work out the ones that you can eliminate or reduce.

This can be reducing electricity costs by making small fixes like turning unused lights off and only having appliances that need to be.

Cut back on monthly bills. Look for cheaper alternatives to internet bills, cell phone plans, insurance and utilities.

  • Reduce random spending

At the time these small amounts of spending seem material, but all add up in the long run. Perhaps avoid buying food out if not necessary and make your coffee at home instead of buying.

  • Have a No SPEND Day: try having a no-spend day or weekend to save cash.
  • Practise Budgeting

Become actively involved in your finances. Set an amount per month that is for spending and put that money aside. Do not allow yourself to overspend on that budget.  

Put these left over cash amounts into savings, paying debts or investment into prepping. 

Pay off Your Debts

Paying off debts may seem like a long term event, but in the event of a financial crisis the likelihood of being unable to meet mortgage repayment gets higher and therefore losing your home becomes a prospect. Use additional funds you have to start paying down your debts starting with the highest interest rate debt.

This also includes credit card debts. Make sure you are spending within your means to avoid racking up interest fees that can put you in a messy position financially.

Diversify Income

Having a single income stream makes you extremely vulnerable to an economic crisis.

Look at means of diversifying income and generating additional streams. This can be utilizing skills you have whether you are handy and can do extra work on the side or are more entrepreneurial minded.

If you have disposable income you can look at investing in stocks or bonds.

The app Robin Hood is a great starting place for beginners looking to invest in stocks. It allows you to buy and sell stocks with no commission. It provides all the information you need and can be used to invest small amounts too.

Another great way to generate extra income is to do a home clean-out. Sell any unused items on sites like Craigslist or Ebay, or even at a garage sale.

Precious Metals

In the event of an economic crisis, the currency will lose all value. Precious metals will hold value and keep their purchasing power.

Take your net worth, subtract your home’s equity and look at investing anywhere between 10% and 30% of your remaining net worth into gold and silver.

Money only has value because that is what it is ‘deemed’ to have. Start converting some of your cash to precious metals that have real value.

2. Consider Off Grid and Self-Sufficiency Practises

Becoming self-sufficient is a great means of reducing your dependency on the government and businesses who otherwise provide essential services.

A large proportion of homes rely upon a functioning economy to provide them with energy, food, fuel and water.

Living off the grid is to live reliant upon YOURSELF.

This could be adding solar panels to your home to generate electricity. Whilst it can be pricey upfront to transition to renewable energy you will reap the benefits in the long term.

It can also include starting your own vegetable garden and learning organic gardening methods. 

Purchase a back-up generator

Many preppers like to have a back-up generator. Buying a good quality one can be very efficient but ensure you have enough oil and fuel to power it. Just be sure to keep it in an open area to prevent fuels from contaminating the air.

3. Keep Yourself Up to Date with the Latest Financial News

These days all the information is at your fingertips. There are multitudes of platforms such as websites and apps that have all the latest 

4. Start Gathering Survival Supplies

Our whole blog is dedicated to survival gear but here we’ll give you a quick lowdown on what you will need should the world descend into financial chaos.

Start Your Food Stockpile

having a substantial stockpile of non-perishable foods as well as water is worth its weight in gold in a crisis. 

Stockpile other Essentials: other important items to stockpile in an emergency include soaps, detergents, shampoo and conditioner, razors, toothbrushes and toothpaste. Collect bin liners too, which can have multiple uses. Toilet paper, paper towels, baby wipes are feminine hygiene products and are more necessary items to stockpile.

If anyone in your household requires medication ensure you have an additional amount. Keep a few bottles of aspirins or other over the counter general medication on hand too.

Make sure everyone in your household has enough socks and underwear too.

Bug Out Bag

a bug out bag is a bag full of essentials that can be used in an emergency. Check out our 83 Must Have Bug Out Bag items here.

Warmth is Vital!

Electric heating will be a luxury not afforded anymore should the power grid go off. 

Providing warmth without electricity could be ensuring you have a stockpile of wool socks, fleece clothing, thermals and blankets.

If your home has a fireplace, get chopping on the wood and have seasoned wood on hand to use for the fireplace. 


The lights will be off too, so look at alternative lighting methods like candles, off grid lights and torches.

Knowledge is Key

It is said that knowledge is power and this is definitely true in a crisis. Keep educating yourself about different survival strategies, skills and knowledge.

The best place to start is books. 

There are many books written from those who have experienced economic collapse firsthand. Many of those who have experienced events like this in Venezuela, Argentina and Greece have written about their experiences.

5. Reading Survival Books

The Modern survival manual: Surviving the Economic Collapse:

Fernando Aguirre has written about his account of the events that unfolded during the 2001 Economic Collapse. His book vital lessons about preparing yourself, family, home and vehicle. It gives invaluable financial lessons as well as what you need to prepare. He also shares self-defense tips.

SURVIVE The Economic Collapse by Piero San Giorgio

This book is a crash course in life during and post economic collapse. It talks about the current status and climate of the world and what the future might hold. This is a great read if you are only getting into prepping for an economic crisis. It offers great strategies to how you can live self=sufficiently in a crisis.

The Money GPS - David Quintieri

As a long time watcher of David Quintieri’s YouTube channel, he offers amazing insights. His book The Money GPS is a concise guide to the Looming collapse of the economy. It provides worrying trends,  and a warning to prepare yourselves for what is coming. It is a fundamental read in educating yourself about the economic collapse.

The End of Money - Mark Hitchcock

Whilst this is not a guide per say, The End of Money is an extremely interesting read that links The Bible to the coming financial collapse. 

Alternatively, there are plenty of survival podcasts available.

Get out the highlighter and pen, and take notes of all the strategies that you can implement.

Guide to Investing in Gold & Silver: Protect Your Financial Future - Michael Maloney

Michael Maloney’s best-selling book is a great starting point to investing in precious metals. He is largely recognized as an expert on the matter (he is an advisor on Robert Kiyosaki’s Rich Dad team!) and provides historical information as well as how to purchase this prime investment. 

Richest Man in Babylon

Being educated about finances and the Richest Man in Babylon is one of the classic reads. It imparts financial advice derived from Babylon times. The lessons taught are invaluable and provide actionable and simple financial strategies. It is an inspiring and motivating read to take control of your finances - important for economic collapse.

Learn from Past Economic Collapses - Like the Great Depression!

Here in the US, we have already experienced mass economic collapse in our history. Unfortunately learning about it is often omitted from school curriculum - yet it can teach us many important lessons.

The book Lessons from the Great Depression for Dummies is a great read and provides in-depth teachings about the causes and turmoil that American’s faced during some of the most difficult financial times. It provides some perspective of a real economic collapse and how they faced and emerged from this disaster.

6. Learning Basic Skills 

Learning basic skills like first aid, gardening, handywork and self-defense are all important too.

Consider taking part in a first aid or medical course to learn basic techniques. 

In an economic crisis, basic skills will be of high value. You may able to use your skills for bartering or to earn small amounts of cash.

Other skills could be baking bread, fixing some leaky taps, fixing a broken door hinge or lock 

7. Learn Self Defense

 In a large-scale economic crisis, violence and riots are inevitable. The best thing you can be is prepared for the worst. 

8. Arm Yourselves

Consider buying firearms to protect yourselves, your family and your home in the event anarchy boils over.

If you have never used a firearm, I recommend enrolling yourselves and your loved ones in firearm classes so everyone is comfortable with safely operating one.

When you purchase a firearm, ensure you have about 500 rounds of ammunition purchased to go with it. 

If you aren’t comfortable with firearms other self-defense weapons are pepper spray, stun guns, knives. If you have a big dog they can also be great for scaring away intruders or attackers!

Buy Self-Defense Gear

Look at purchasing bulletproof vests or body armor to shield yourself from gun threats.

9. Protect Your Household

Look at securing your household. This can be checking for faulty locks and reinforcing doors and windows. Ensure your alarm systems are fully functional. 

Security systems like cameras can also be purchased as cheaply or as extensively as you desire.  A secure perimeter will make your home less susceptible to burglaries.

Tips for Protecting Your Home

Planting thick shrubbery to deter intruders 

Build a solid perimeter - have rigid, tall fences, gates all have locks, doors and windows all have reliable locks

FUN: a fun way to secure your home is to set up a game with your family. Everybody has to see if they can get inside the house without physically breaking-in. This is a quick way to find entries that have to be reinforced.

A Safe Room

Pick a room in the house which is the most secure room in the house and make it your designated safe room. This is the room in which you and your family will hide out if you have to hunker down. You might have to make some adjustments to the room to make it a safe room, but you could make this into a fun project. 

A good safe room will ideally have:

  • steel door at the entrance
  • Deadbolt lock and door jammer
  • Good ventilation
  • Access to communication devices and internet if the electricity is still on
  • Radio

A cool idea for a safe room is to have a secret ‘bookcase’ door like in the movies.

This video shows how you can make your own secret room door - a great idea for an hidden room to hide in.

Own an Up-to-Date Passport

Having a current passport affords you the ability to leavy the country legally should you decide to. This may not be your first option, but prepping is keeping all the options open.

All About Bartering

When the currency becomes worthless, it is quite possible that people will trade with items that they now deem to have value. Especially when local supplies dry up, bartering will likely be common practise. People will 

Items that are good for bartering include alcohol, tobacco, batteries, ammo, coffee, first aid supplies, lighters and clothing. 

Own a Good Set of Tools

Create your own list of tools that you might need to assist in your self-sufficiency.

  • Handy Tools

We recommend having a solid tool kit filled with general handyman tools that can come in hangy. This includes saws, screwdrivers, chisel, pliers, safety goggles, gloves, nails, screws, glue and any other tools. 

  • Kitchen Tools

There are a bunch of kitchen tools loved by preppers that can make life a lot easier in a crisis. If you are stockpiling canned food make sure you had a number of can openers should one break. Another awesome tool is an electric grain mill. You can use this to make flour out of wheat and grains. 

Maintain Good Health

Keeping in good health and shape is always important, but particularly if you are unable to get medical assistance if needed. Eating well, exercising regularly, attending all routine medical and dental checks and getting enough sleep and so on are all means of ensuring you are in tip-top shape. 

People in impoverished countries like Venezuela suffered heavily in times of economic hardship, as low immunity combined with no access to medical aid was widespread. 

Being healthy will keep your immune system strong and medically self-sufficient.

Departing Words

Prepare for the Worst, Whilst Hoping for the Best

This is a great mantra to live by, especially in our current climate. 

You always want to remain optimistic, whilst still being realistic. Why not start preparing whilst everything is still okay. Items will be readily available for you to stockpile, and they will be available at normal prices. There won’t be mark-ups to reflect high demand or purchasing caps. You will be thankful in the long run.

To be ready for anything, you need a plan in place. History has always shown that in a disaster the people that prepared were the best-off. 

In natural disasters you bet there were people wishing that they had bug-out bags filled with important goods at the ready for their family to grab and leave with!