Can you make your income and life recession-proof? Do you know how to survive recession? It is hard, but it is not impossible. When you are on good footing, have a great job and you are doing very well, you generally do not care what happens tomorrow, but you should. You could lose your job, you know. If you do, what will happen to you? As soon as you get your first job, always live with the notion that recession is just around the corner, that something could happen and render you income-less. That way, you will always be on your toes to recession-proof your life.
Recession-proofing your personal finances
There is a start to everything, even to knowing how to survive recession. Smart people prepare for recession when they are in good jobs and are doing very well, and that is what you should do. First, get your financial house in order, starting with the debts, and pay off as many of them as you can. Establish a retirement scheme and start saving for that too. You should also keep some money aside for a business so that you can supplement your income. If your only source of income is the salary, then it means that if you wake up to retrenchment one day, you will be left high and dry.
Keep expenses as low as possible during recession
One of the most appreciated personal financial tips when recessions strike is cutting down on expenses. Since the value of the money depreciates fast, even the little that you have cannot last long.
- Evaluation of your mortgage: Review your mortgage to lock it at lower fixed rate as this lowers the risk of elevated interests.
- Refinance the credit cards that have high interest: If the interest rate on your credit cards is high, move balances to other credit cards with lower or even 0% rates. As you refinance the credit cards, make sure to factor transfer fees for balances.
Cut back your costs as much as possible. In the year 2007 and 2008, many businesses in the US cut back on their costs by letting employees go. You should also find out what you should let go if you aim to solvent throughout the recession period. You can cut your expenses in many ways. For example, you really do not need to eat out when you are facing a hard time. Eat at home and save your money. You can also cut other activities like going to the theater.
Find out what you can sell. For example, do you have an extra car that you do not need? Sell it. Is there stuff that you no longer use? A fridge maybe? Sell it online.
Change your children’s school from private to public, which is cheaper.
Involve every member in cutting costs
How to survive recession is not a joke. It is something that you should make your children understand. And anyway, they will be affected too. In fact, when it comes to personal finances, you should involve everyone early enough when the times are good and when they are bad. Sit them down and explain to them why they will not eat pizza as often as they used to, or why they have to change from private to public school.
Keep your source of income intact to survive recession
If you are going through hard economic times, it is time to really earn the money that you are making from your employer. Show up early, work as hard as you can and try anyway possible to save the employers some money. Show them why you are worth keeping even as they let employees go right, left and center. To know how to survive recession, you will need to keep your job.
Continue saving money. When things are tough, that is the time to keep even more money aside for emergencies. Remember, when a country is facing recession, costs of services and products rises.
Start a business
You need a sidekick to give you some extra money. In your financial life, you should not put all your money in one nest! You need an extra source of income because salary alone is not enough. Bills increase almost monthly, but your salary does not grow as fast. So discover your passion, and then turn it into a business. Do this when the times are good economically so that you can build it up without stress. With your business income and salary, you will know how to survive recession.