Recession is a term that is feared by every country and every economist but can’t be avoided forever by anyone. There always comes a time when the country undergoes economic downfall and thus the country and its citizens face the consequences of the monetary tragedies that follow the disaster. Recession welcomes several unpleasant news like unemployment, slow economic growth of the country, a fall in the GDP, low investments, etc. Some people assume that if their country is facing steady economic growth for a very long time, they will never fall prey to a recession. But no, even after certain countries are performing well with a steady rate of economic growth and GDP, they do come across recession at least once in many years. While recession might not be something that you are awaiting with pleasure rolled up your sleeves but it is something for which you should be prepared for. The following are the measures you could undertake so you won’t have to worry when the recession wave hits you.
Pay Off All Your Debts
The first crucial step that you should resort to is paying off all your debts. These debts could range from anything as small as paying off some loans to your friends to especially as big as paying off credit card loans. As soon as you sense recession approaching your economy, there is a potential threat to your employment as well. You should pay off all the loans, clear off all your mortgages and every other high-cost debts that could affect you adversely due to an economic downturn. If you procrastinate and push your paying off to the near future, the debts will keep on piling before your eyes until the inflation wave hits you and all you can do is wait until the recession goes away. However, this will do nothing good for you except for the accumulation of debts. Even if you are confident enough that you are nowhere near losing your job, paying off your debts is still a healthy financial practice and helps you to plan your future expenses carefully while also saving up to a great extent. Paying off your debts will also give some oxygen to the future cash flow and prevent burdening your resources then.
Cut Down on Unwanted Expenses
You can save yourself a great deal if you figure out the discretionary items and services that don’t require your funds to be spent on. When you think that recession is coming, try to cut down on all the products or services that are possibly not a necessity like Netflix subscription, gym membership, or hobby classes that you haven’t been attending. Keeping them on the list will only add up to your expense chart and eat up your bank accounts in your hindsight. Apart from cutting down the discretionary services, you should also consider modifying your expenditure patterns so you could save up more and draw a budget for yourself and your family.
Insure Your Loved Ones
According to our previous claim of cutting down on expenses, people often misunderstand and think that insurance is also one of the unwanted expenses. But you need to understand that health is not something that should be avoided when looking for saving alternatives. Our economy may any day take a serious hit and insurance will no longer be a possible option for you. Thus it’s essential for people to consider insurance for their loved ones and prioritizing it before the recession wave. Some employers provide their employees with group medical cover which insures the employees’ whole family’s health. However, in the event of negative turns of the economy, employees can also lose their jobs thus losing the group medical cover as well. This makes it important for the employee to not completely rely on group covers but get their families individual medical covers to safeguard from the economic downfall.
Stick to One Stable Job
During the recession, people need to stick to one job. An individual must avoid hopping from one job to another just so they could find the best job that suits them. Recession is a period where the job market is volatile and it’s best not to experiment during this period. Although it is least advised, even if you are keen enough to take a brave step in switching your job, it is advisable to carry out thorough research about the company and its performance in the last decade so it is easier for you to evaluate its tendencies and scope of work. However, if you are not the one who wants to take up risks of switching your job, you should strive to perform better at your current job. It doesn’t matter if it takes longer working hours or complete dedication, but make sure that recession won’t result in the company picking you out to balance out its business as per the economic downturn.
Look for Extra Income Sources
We are not asking you to shift your major focus from your important job just to explore other sources which you can place as a backup if things go south. Look for extra income sources only when you think that you can make space on your already full plate of job and other responsibilities before the recession wave takes you in. What we mean by extra income sources is, look for some side gigs that is also your hobby and also something that you could earn something out of. Extra income could also mean you doing some freelancing stuff so you can cover some extra savings and pay off some pending debts.
If you think that it is impossible to manage your funds during the recession, then you are wrong. You only require a good technique and nitty-gritty of the measures that are important to undertake. With the right path, you will be able to locate the best way out without a recession
Take Care of Your Health
Last but most importantly, do remember to take care of your health! With the COVID-19 virus looming, you must take all the necessary precautions to avoid falling sick. That includes maintaining a safe distance in all your interactions with others, making sure you keep your mask on at all times, and sanitizing your work space. At a time like this, falling sick could seriously derail your financial plan. Do your utmost to take good care of yourself.