Did you know that the formal definition for a depression is that GDP drops 10% or more?  Think we’re getting close?  (The Gov’t can also change what is included in GDP…) Well our guess is we’re getting near to one. Along with that, nearly 75% of Americans are also worried that they or someone in their household could lose their job within the next year. The best defense against losing your job and even surviving a depression is to save money, spend less, cut costs, bank the difference, and invest it in safe investments or investments that will make you money in a down economy.

First, cut costs. That includes not just using coupons, but buying less of expensive items, and cutting out unnecessary items. For example, you might be using coupons but using them to buy things you don’t really need in the first place. So, start with what you need, and buy generic if it’s cheaper.

Next, manage your discretionary spending better. Try using the 30 day rule: wait 30 days before making a big purchase, and see if you still want or need the item after that time.

Third, try banking your savings. Saving 20% for example is not worth much if you spend it somewhere else. Whenever you save money, put the difference into a savings or investment account. This way you’ll see the direct impact – wealth – from your efforts.

Finally, put your money to work. While you might be gun shy of stock mutual funds, remember that there are many other options for investing – bond funds, Exchange Traded Funds (ETFs), government backed inflation indexed bonds, and other options. You need to spend some time to learn more about investing types beyond the basic “growth stock mutual fund” since those funds have not only taken a nose dive, but will probably be poor performers in the short run in a depression.

Spend the time to save money and put it in a savings or investment account can not only be safe but help you to build wealth in the event of job loss or other emergency.