The recession has been one of the main 2023 news stories up to this point. Simply recession is an economic state of a country where its output shrinks causing inflation and loss of jobs. Many countries are on the brink of economic collapse. This is not an ideal situation for people. In this article, we’ve outlined a few strategies for surviving through a recession.
Live below your means
If your business or job is still up and running then consider yourself to be blessed. But it never hurts to either find some extra income source or cut down on unnecessary expenses.
This is the ideal moment to start tracking your spending if you have never done so. You could be surprised by how much money you spend on unwanted memberships, purchases, or even on eating out. These are the expenses that, taken individually, don’t seem like a huge deal, but when added up for the full month, you’ll see just how much money you spend on them.
Consider odd job
If unfortunately, you have been laid off then apart from finding a place in your field consider other odd part-time or full-time jobs. Ideally, you should enjoy your job, but extreme times call for extreme measures. Doing an odd job might not make you feel happy nor it might boost your profile in your industry. But remember you are bringing something to the table at the end of the month. This will give you and your family way more peace than waiting for the right job.
Don’t panic about your investment
During such times it is natural for the stock market to crash. This triggers a lot of panic selling and buying. Don’t fall for this. Think about long-term gains. These crashes could be misleading. A 50-year-old company honestly goes broke just because its stock falls. To speculate on the currency, oil, or gold at this time would be foolish. You run the danger of investing at the peak and sticking on through a downturn while losing money. Businesses do not decide to undertake capital investments during a recession. Neither should you. Don’t purchase property because someone guaranteed you it will never lose value. Be mindful that many assets will see a sharp decline in value when demand and interest rates decline, as they do when they rise.
Utilize your layoff period
If you are unable to secure your job or find an alternate you can still utilize your time productively. Use the time to learn new skills relevant to your profile. Study the market and understand new trends. Look for alternate job roles which you can fit into. If you always wanted to start something of your own then this is the time to make a solid plan. In the end, even though it might seem hard, one way you can use your time productively is to take a rest. Sometimes a good rest can help you jump back stronger from a hard situation.
Make a financial plan
Analyze all your income sources, be it from other family members or your alternate passive source. Note down all your bare minimum expenses. Now check if a single source is sufficient to manage your bare minimum requirement. If it does then use your other income source as surplus money to save or invest. If you can achieve this then in a situation where one of your income sources is cut off you will still be able to manage your living expenses.
Maintain your credit score
Your credit score will tell how sincere you are with your money. A higher score will help you with securing a loan at a lower rate of interest. Considering the downfall of the economy you might end up in a situation where a loan is essential to move forward. If you would have maintained a good score it will be easier for you to borrow money. It might look like a bad idea to borrow money when the economy is crashing but sometimes you need to take a few steps back to move ahead. To maintain a good score make sure to pay off your debt on time. Paying off your loans should be a top priority to survive a recession.
Stay positive
It might seem obvious but so many of us get trapped in pessimism. Have a look at the history, no recession lasts forever. Surviving a recession is hard but don’t forget to remind yourself that it will end one day. When everything is already going south, compromising your health is probably the last thing you would want to do. Try to maintain a positive mindset with the situation you are in.
If you would like to know more about how a recession begins and its impact then click here.