The U.S. unemployment rate will rise higher than 10% before Christmas.
The federal unemployment rate is currently 9.5%, the highest rate in 26 years.
The unemployment rate has already crossed 10% in sixteen states - almost 1/3rd of all U.S. states.
Yesterday’s 70 cent increase of the federal minimum wage to $7.25/hr should destroy an additional 300,000 jobs. That alone should push the unemployment rate to 9.6%.
It will only take a few more bad decision by the folks in D.C. to push the unemployment rate above 10% - and they are making bad decisions at a rate faster than we have seen since 1979.
If you are not yet unemployed, I strongly urge to you increase the percentage of your income that you are putting into savings. For most American households, the loss of a job by the primary breadwinner for just a few months can cause missed mortgage payments and the risk of foreclosure. You don’t want that to happen to your family.
Cost cutting opportunities are numerous. Many Americans have cut back or canceled their Summer vacation plans. Thanksgiving and Christmas trips this year may be replaced by telephone calls. This Christmas, consider a strict no-gifts policy for everyone in your family over twelve years old.
Americans are already driving less and walking and bicycling more. This is as good for your physical health as it is for your financial health. Most of us eat out far too often, which is often both unhealthy and expensive. Avoid rip-off stores like Whole Foods (also known as Whole Paycheck); shop in bulk at value-focused stores like Sams or Wal-Mart and cook at home. You’ll save money and you’ll also help bring your family closer together.
If you have an available space, consider planting a garden full of nutritious vegetables. If the politicians continue to mismanage the economy, food may be in short supply - at any cost.
Stockpiling does not make sense at the current time, because we are currently experiencing deflation. When this turns around and we start seeing inflation again, consider stockpiling reasonable amounts of food to provide for your family during periods of social unrest.
Lastly, although I know you have probably seen the value of your house plummet, this may be a good time to consider selling your house and trading down into a less expensive home. This is the fastest way for most of us to take years off of our mortgage. If you can, try to find a house further out from the cities. This will be safer if civil unrest does occur and it may give you room to plant that yummy vegetable garden.
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Greg Martinez is the author of Unemployment Rate to Cross 10% and Overcriminalized.
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