Bharat SainiLast Updated on February 27, 2021 by Bharat Saini
A country’s economic crisis could mean different things for everyone. Although many financial and economic analysts watch the trends to predict when recessions might hit, an occurrence such as the COVID-19 pandemic was not something we saw coming.
This shows that although I’m an excellent market analyst, I still need to stay prepared for events beyond human control. It may be that you’re in a similar situation, having looked at a stock advisor review on Joywallet a while back and made a decent living off of stocks beforehand, or you may be in a questionable position. Either way, here are viable tips we can employ to remain recession-proof or help manage the situation.
1. Shop for a Better Credit Card Option
Credit cards make it easy to transact even when I do not have the cash. However, their convenience also comes at a cost. Their interest rates could be one of the things keeping me from being financially practical. This is why shopping for the best credit card deal is a good idea.
Once I find a few options, I will want to ensure that transferring the balance to a different card does not cost more than the balance itself; else, this will be another poor financial decision. Some banks offer lower introductory rates, so we can work with this during the initial period and pay off the debt before the interest hikes.
2. Pare Down Expensive Debts
If I am afraid I’ll lose my job, I will not want to be left with expensive loans reminding me how much I have to pay off from my savings every month. This is why paring down expensive debts is a good idea during a recession. Such obligations might include credit card loans, student loans, or mortgage loans, etc.
3. Look for Budget Scavengers
When money flows freely, we often end up with many expenses that we do not critically need. For example, one might prefer eating out thrice a week, which, if investigated, equals spending a lot on take-outs. Since cooking at home is more affordable, we might want to do away with the take outs or reduce them to once a week.
Another example is all the money we waste on finance charges such as late fees. If I can pay anything on time, I should avoid penalties that drain my accounts. I aim to ensure I have enough money to last me months, so whatever cent I can save will be worth it.
4. Work with a Realistic Budget
Although budgeting is an excellent financial skill, making realistic budgets should be our aim. Going beyond your budget can just be as expensive as operating under it. I feel I have more than enough in the former, so I spend without thinking about tomorrow. When I focus on spending below my budget, I often forget to cater for a necessity. Since I hadn’t thought about it, I spend more trying to make up for the neglect.
Realistic budgets are easy to create and only require honest and thorough information. Ensure you first cater for basic needs and then move to secondary needs.
5. Maximize on Liquid Savings First
Investors understand that the stock market is very volatile during a recession. Therefore, it is never a good idea to take money away from an investment, especially if early withdrawals will lead to massive losses. I’d recommend we use liquid savings, be they silver, gold or other kinds of asset out there, as much as we can in such times, including savings accounts and money markets. It would also be an excellent time to re-evaluate my risk assessments.
Conclusion
A recession may mean a time when finances are critical. Still, it can also be the right occasion to rethink how we acquire and spend money. If I can, I’d want to look for other income opportunities, such as an extra job, as no one knows what tomorrow holds. A final disclaimer; do not try to cut down a budget by neglecting equipment maintenance. This might mean expensive bills soon.
