Hi Everyone! Welcome to this guest post from MoneyWithJim.org!
While recessions can’t be avoided, they can be better prepared for if you start planning for them in advance. Here are some helpful tips on how to get right down to it.
Save up as much as you can
Saving up as much as you can as early as you can is an extremely valuable step in the right direction when a recession hits. This way, you’ll have access to your own funds and not borrowed funds, which can come at a higher cost than you’re willing to pay for it.
Spend as little as you can
On the flip side of the coin, you should be trying to spend as little as possible in your everyday life to adjust more easily if you had to cut your salary in half, for example. Getting into this practice now before tough times hit will give you the opportunity to spend less without the stress, as it’ll be your training ground before the storm hits.
Think outside the box
Few jobs are 100% secure, so you should think outside of the box to secure your income in other areas. From starting a side hustle to expanding your investment portfolio, there are numerous options you can consider to soften the blow of a recession. Speaking of softening the blow, what if you could avoid the blow altogether with recession-proof jobs that aren’t as affected as much by the state of the economy? Some examples of careers that you could pursue on the side to help boost your income include repair services, accounting, or even freelance services to keep you busy and your pocket fuller at a time when you could use the distraction. Furthermore, since each of these is a service-based business, you don’t require much start-up capital at all to get going in the first place.
Get organized
Being organized is often seen as an underrated skill until you have to find those all-important documents you’re looking for in a hurry. Add this to being in panic mode, and this might even cause you to overlook or gloss over the fine print, which may be to your detriment. If you’re dealing with large PDF files, you can use a tool if you want to extract just some of the pages, making them easier to handle.
Pay off your debts
If you have quite a bit of outstanding debt, then you can safeguard your finances better by settling your outstanding debt as fast as possible. Start with settling the largest amounts with high interest first so that the interest doesn’t snowball into something that is unmanageable. And then, before you know it, your balances and the relevant interest amounts will start to reduce over time until you eventually owe very little.
Pay attention to your mental health
If you’re feeling overly stressed, you can’t be expected to think clearly. Moreover, prolonged periods of stress can lead to serious health issues, which can end up costing quite a bit to remedy. Paying attention to your mental health and health, in general, can help you overcome and even prevent the negative consequences of stress so that you can make more financially sound decisions at critical times.
Getting through a recession favorably may sound like hard work. However, you can succeed when you are open to options such as taking on that side hustle you may not have been open to before to help you thrive in, through, and beyond a dreaded recession.