Talks of recession taking place have fueled fears of another spate of massive job layoffs similar to what transpired during the 2008 financial crisis. Although Wall Street financial analysts are saying that a recession is not at all forthcoming, it would be best to at least take some precautionary steps in case the current economic downturn continues on a trend that will lead to another recession.
According to the recent GOBankingRates survey, about ⅔ of the 1000 Americans surveyed are ill-prepared when it comes to facing another Great Recession. Actually, that is what is making many jittery, since they have yet to take actions that can make them more resilient against the adverse effects of business closures and job losses.
Being prepared does not necessarily entail prevention of recession because there are other factors affecting the economy. The point is, instead of just waiting with a look-see attitude, taking proactive steps that work toward bolstering one’s financial resources is a better way of moving forward during uncertain times.
Some Suggestions on How to Prepare for Another Recession
Individuals can consider taking actions that can make them better prepared, if in case the downhill trend continues for a prolonged period. According to economists, recession happens if the economic decline continues or worsens during a continuous six-month period.
1. The first step of course is to start saving even in little amounts. Instead of squandering extra money on non-essentials, save a few dollars to build an emergency fund. Bolstering whatever savings you have with an emergency fund will help you overcome anxieties over an imminent recession.
2. Since you current income may be just enough to help you meet the current costs of living, taking on an extra job or a side job can provide you the money you can save in preparation.
Eat right and live a healthy lifestyle in order to avoid incurring additional health care costs that could erode your savings.
3. Avoid the lure of get-rich quick schemes because these are the times when scrupulous individuals will offer you faster and easier ways to earn extra money.
4. Do not put your investment money in just one basket. Moreover, constantly read on business news and analysis of financial reports in order to get an inkling of stocks backed by bad or non-performing businesses.
5. Refrain from using your credit cards too often, because doing so will only yield interests that represent additional costs. If in case you made a credit card purchase, settle the total cost immediately in order to prevent interests from compounding.
6. Start selling items you no longer need, so you can convert them into cash that you can save. Do this while people can still afford to buy even second-hand offers, as it will allow you to trade them for reasonable prices.
Saving and preparing does not necessarily mean sacrificing comfort or living a less enjoyable life. It is mostly about making thoughtful decisions based on the principles of practicality, security and flexibility.
Research well on options so you can zero in on choices that bring more or less the same benefits at lower costs, such as those offered by trusted online resellers. Cost-saving options can bring in additional money that goes to building your emergency fund. However, make sure you are not exposing yourself to unnecessary risks when deciding on practical choices.
Most importantly, stay flexible since economic downturns as a prologue to recession can bring changes that will require you to make certain adjustments. .