Are you Ready for 2023? Getting Mentally Prepared

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A kayaker in rough water
When facing rough water, paddle through it to maintain control.

One year ago, on June 20, 2021, the Dow rallied 587 points to close at 33,877. It closed last Friday at 29,889, down 3,988 points or 12 percent. The CPI (inflation rate) today is at 8.6 percent, up from 5.4 percent a year ago, back when the administration told us inflation was “transitory” and would go away by year end. The average cost of a gallon of gas is $4.98, up $1.91 or 62 percent in the past year.

A year ago, people could go to the grocery store and buy what they always bought and the cost at checkout would be pretty much the same as it had been for months. That’s no longer the case. As prices on common food items have risen by 30 percent to 50 percent, everyone has to shop more carefully, and people are dining out less often.

Now ask yourself, what will these numbers be in another year?

Projecting Future Prices

I don’t have a crystal ball, but if you just apply the same percent increase, we can expect prices will look like this in June 2023:

  • Dow Jones          26,302
  • CPI                      13.7 percent
  • 1 gallon gas         $8.06
  • Food will be 170 to 225 percent more expensive than it was in June of 2021, assuming you don’t find empty shelves when you go shopping.

I expect the price of gas will reach $8 this year and the cost of food may be even higher, but the above estimate is a good for two things: One, waking up anyone who is ignoring inflation and hoping it will go away and two, they providing a starting point for planning. I like to plan by asking what if questions.

For example, what will I have to change if gas reached $8 a gallon? What foods will we have to eat less of if food prices double? Will my retirement or other financial plans change if my investment accounts drop another 12 percent?

And here’s the biggest question of all: What are you doing to change your life now so you are better adapted to what 2023 might look like?

Resisting Change

My daughter, who came up to homestead-sit while we were on the road last week and then stayed the weekend with us, is angry about food and gas prices, but she hasn’t changed her behavior. We had a conversation that went something like this.

Her:       “My car only gets 25 mph in the city. These gas prices are killing me.”

Me:        “Cut back on your driving.”

Her:       “I have a lot of places I have to go.”

Me:        “Really? I thought you had to go to the office only twice a week and could work at home the other days.”

Her:       “Well, yeah, but I have other places I have to go.”

Me:        “Don’t make a special trip. Go shopping on the days you are already out at work. Combine all your trips into one big one. See if you can drive only three or four days a week.”

Her:       “I can’t do that. I have a busy social life!”

Me:        “You did it during COVID.”

Her:       “Grumble, grumble.”

This is the example of someone who can change their behavior to save money. They just don’t want to. I’m willing to bet that by the time gas reaches $8 a gallon, she’ll be cutting back on driving. She’d be better off if she started now.

It’s also a good example of how people resist changing, even when they know deep inside that it’s the best thing for them. They allow themselves to be carried along by the current, even when there is whitewater ahead and they should steer their boat.

Ask yourself: Are you adapting to better survive the future? Are your preps hard goods like food and bullets, or are you mentally preparing for the tough times ahead? It’s great to have food and other supplies; I strongly encourage building a prepper pantry and gear stockpile. It is also important to be prepared to eat canned Spam when you want steak. It’s may become important to recognize that you have to eat those leftovers you used to toss out. You need to start preparing for the day when you can’t afford the fast food you eat, the coffee you drink, and have to cut way back on your social activities.

Steer Your Boat

I’m not trying to beat up on twenty-somethings, but here’s another example of a conversation we had:

Her:       “So-and-so (a close friend for the past 15 years) would kill to live out in the country like you do.”

Me:        “So what’s stopping her?”

Her:       “Uh… Money.” (This was a guess; apparently no one had asked the question before.)

Me:        “She could rent out here for less than it costs in the city. The cost of living is less, as well. Do you mean she doesn’t want to leave her job? What does she do for a living?”

Her:       “She’s teaching foreign languages and doing some tutoring… online.”

Me:        “So she could live anywhere? If this is the life she wants, she should move before she gets tied down by a husband with a job in the city or by kids they want in a special school. She’s young and single, so there’s really nothing stopping her from moving, except maybe fear of the unknown.”

Her:       “Yeah, I see what you mean.”

What’s stopping my daughter’s friend is fear of leaving her comfort zone. Fear of leaving the area in which she grew up and the safety net of having her parents living a few miles away. She’s 27, smart and lives on her own, but she is not thinking outside the box.

How many of you are afraid to make a move, or are unwilling to take a big step because it’s a risk? It’s easy to keep doing the same-old, same-old. It’s also a form or normalcy bias. Ask yourself, are you sure doing nothing is the best thing to do? If you keep doing the same thing, you’ll get the same results. Are you happy with those results? Are they fulfilling your dreams and desires? Sometimes taking a risk results in a reward, and often reward may be something you never dreamed of.

Tough Times Ahead

While I can’t tell you what the rate of inflation will be in June 2023, I can tell you that food will be scarcer and more expensive. I can predict with some accuracy that the winter of 2022/23 will be a cold, angry winter across much of the Northern hemisphere. I expect the Misery Index will continue to grow and consumer sentiment will continue to drop. We will see civil unrest, possibly as soon as the Supreme Court rules on Roe v Wade this week, and again when the Republicans take majority control of the House and Senate in the upcoming elections. (The liberals are sore losers). I can’t tell you when China will attempt to invade Taiwan, but I think we all know they will one day, especially if Xi stays in power.

No matter how you slice it, we’ve got some tough times ahead. What you do to survive today might not cut it then. You may have to change your behavior, your plans, and how you live. My suggestion is to make changes now, while you are in control, rather than later, when circumstances force you to. You will be better off if you can plan, prepare and act on your own time. You’ll also feel better about it and adapt to your new situation more easily.

Of course, you can be like the majority of Americans and do nothing and hope the government saves you.

Good luck with that.

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