By Zubair Naseem
6 October 2022
Inflation is at a 40-year high. Unemployment rate is increasing. Rates of interest are rising. Additionally, a gallon of gas now costs a scary $5.
Investors are being taken on a terrible roller-coaster ride by the stock market. Even if you haven’t looked recently, you are aware that your retirement account’s value is declining. Unsurprisingly, cryptocurrencies are collapsing.
And now you’re hearing that a recession may already be upon us or is unavoidable.
You recall how devastating the Great Recession was for so many people. Therefore, being told to “cool down” or that “this too shall pass” won’t help you deal with your anxiety over your financial situation.
Making decisions based on recessionary worries, though, can put you in a worse financial situation, so you should avoid doing that.
Bear in mind, recessions are not permanent. Here is what you can do to survive and thrive during the current recession, and making sure you are financially stable afterward:
Having a second source of income can make the difference between being able to sleep at night and worrying about money when circumstances are rough. By taking on more employment during times of plenty, you can start by raising your savings.
In addition to earning extra money, a side hustle or small business acts as a safety net in case your primary employment is affected by a downturn in the economy or a potential layoff. You might find the financial security you’ve been looking for with this advice.
If you’re not attentive, your monthly costs will up quickly. It’s essential to keep track of your fixed costs if you want to weather any storms and prevent unforeseen circumstances. Start by going over all of your monthly expenditures and separating your needs from your wants, such as a new cell phone or a new car.
Needs include things like utilities, rent, and food. When you become aware of how much money you require for the necessities, you can start cutting back on unnecessary expenses and conserving money.
Debt is frequently unavoidable, but there are ways to lessen the amount you owe. Your cash flow will gradually improve as you pay off your debt. If you have additional large debts in addition to your mortgage, you should prioritize paying them off first. Reduce the number of credit cards you have to start. You only require one!
Attempting to cut your creditors’ interest rates is another option. You can prevent excessive interest rates and late penalties by making complete and timely payments on your invoices. To avoid paying more in interest and fees if you are unable to make full payments, try to pay more than the minimum amount required.
Although there are experts who can aid you on your financial journey, you should nevertheless regularly stay up with financial developments yourself. One of the best investments you can make is in your education, rather than relying on professionals to complete the task for you.
You won’t necessarily become an expert in economics, but you will comprehend the economy and how it affects your money better. Take a finance course online or sign up for one at the junior college in your area. There are many excellent books on managing personal finances that you can look at as well.
Several community programs are frequently available to assist during a financial crisis. These can include cash reserves for unforeseen expenses like rent, food, and utility payments. Find out what you will require and check if there is a facility, group, or person that can provide it, even if only temporarily.
Understanding the resources in your area can make the difference between financial survival and potential financial devastation. Keep a current list of those resources on hand for future use.