Getting Through Periods of Economic Recession
During an economic crisis, try to resist the urge to purchase anything you do not strictly need. If you just want the thing, avoid making the purchase. Also try to buy things that are second-hand rather than new.
When you see news stories about a shrinking economy and recession looming on the horizon, try not to panic about your finances. Recessions are worrying. However, other people have survived them, and you can, too. Here are eight steps you can take to ensure you and your loved ones get through the recession intact:
Pay Off Your Debts
Getting through a recession is tough when you have a lot of debt. If you want to make your life a bit easier, you should pay off as much of your debt as possible. Start by paying off the credit cards and loans with the highest interest rates.
Make a few phone calls to see whether any credit companies will lower your interest rates to make your debt easier to pay off. Consider a consolidation loan. Do not get into further debt. Avoid expenses you cannot afford without using a credit card.
Diversify Your Portfolio
It is not wise to invest solely in stocks and high-yield bonds when the economy is not doing well. Instead, diversify your financial portfolio. Diversifying your portfolio is vital during a recession. If you are unsure what further investments to make, consider real estate and precious metals. Such investments are wise when the economy is taking a nosedive.
Try putting between ten and fifteen percent of your assets into precious metals such as gold bullion and silver and an additional ten percent into property investment. Taking steps to diversify your portfolio will offer you a measure of protection when times are difficult.
Develop Your Skills
Investing in yourself is always worthwhile. You can invest in yourself by continuing your education and expanding your skillset. The more education you have, the more attractive you will be to potential employers.
Enrolling in an educational course may be less expensive than you think. If you take the time to shop around, it is easy to find discounts and offers. Furthermore, online courses have made studying more convenient than ever before.
Is your career recession-proof, or is it in jeopardy? Working in a manufacturing plant is risky during times of recession, as is a career in the food production industry. Your job may also be at risk if you perform secretarial duties or work in inventory management.
Some jobs are more recession-proof than others. For instance, there will always be careers in specific fields. These include healthcare, education, law enforcement, financial services, and funeral services.
If you think your job may be at risk because of a recession, do what is necessary to change your career path. For instance, you might need to do a course or some voluntary work to increase your employment chances in a specific work sector.
Live Within Your Means
You may think you need a set amount of money to live on each month. However, you can probably survive on less than that sum if you are willing to make some sacrifices. For instance, you could spend less on clothing or stop a few of your monthly subscriptions without it having any negative impact on your life.
During an economic crisis, try to resist the urge to purchase anything that you do not strictly need. Before buying something, ask yourself if it is a matter of want or need. If it is a want rather than a necessity, avoid making the purchase. When possible, buy things that are second-hand rather than new. For instance, a pre-loved textbook will serve you just as well as a new one.
Do you have gadgets, furniture, or luxury items that you do not need? If you have unneeded items, consider selling them and investing the profit. Making new investments will expand your financial portfolio.
Grow Your Own
Do you have a lot of outdoor space? If you have a sizable garden, use it to grow herbs, fruit, and vegetables. When you grow produce at home, you will not need to buy as much. If you have more produce than you can eat, make jam or pickle it. You can then eat the jam and pickled vegetables during the fall and winter months. You can also trade excess produce with neighbors for foods you don’t have.
Start Repairing Clothes
In modern society, people throw away clothes that need mending rather than repairing them. Consider purchasing a sewing kit or even a sewing machine and learn how to use them. You can then start to fix your clothes instead of discarding them when they need repairing.
Reduce Your Fuel and Energy Expenditure
Stop driving your vehicle to stores less than a ten-minute walk away. Instead, walk and save money on gas. When you are at home, be aware of how much energy you are using unnecessarily. Do not leave lights or televisions blaring in empty rooms.
Unplug devices you are not using. Do not leave your smartphone plugged in if it is already at one hundred percent. In cold weather, wear more layers instead of putting on the heat. In warm weather, remove a few layers before switching on the air-conditioner.
When the economy is in bad shape, it makes life challenging. However, heeding the advice you have just read will make surviving a recession easier. Looking for other opportunities to save money and earn more of it wherever possible will also help you remain financially solvent during economic uncertainty.