There’s a lot of uncertainty with everything going on in the world. Due to these uncertain times, there has been some talk about a possible recession.
I know that even the possibility of a recession is scary but it’s good to at least have conversations about it, and plan for the what-ifs.
You want to know how to prepare for a recession and avoid becoming financially ruined. The last thing you want to do is face a recession unprepared.
A lot of us are old enough to remember the housing crisis some tears ago. If you aren’t familiar with it, I’m sure you remember your parents worrying that another recession was upon us.
Recessions have a way of touching each and every one of us, even if it’s in a small way.
The best way to avoid being negatively impacted by a recession is to be prepared.
How to Prepare for a Recession [Before It’s Too Late]
It is good to have hope and faith that things will always go willingly. However, for as long as life has air, recessions will happen.
You can hold true to your faith but prepare for a recession also.
A recession doesn’t affect just one person or a certain population. The effects of recessions eventually trickle to everyone.
Whether it be loss of jobs, lack of availability of basic home goods, or home prices taking a dive, we are all impacted by recessions.
To get you better prepared for the inevitable, here are # tips on how to prepare for a recession.
Learn these tips and incorporate them into your life to cover your finances during an economic downturn.
Earn More Money
The fact of the matter is that your money can only go so far. You can save and keep saving, but saving can start to feel like a punishment when you feel have no room to financially breathe.
Yes, debt sucks.
Yet, squeezing money out of rock seems pretty difficult to say the least.
The best way to fight feeling bogged down by debt when trying to save money is to earn more money.
Honestly, I hated working for more than one job. But when I needed to supplement my full-time income, I worked several side jobs.
Earning more money won’t happen by sitting around wishing for it.
Aggressively pay off debt
Saving money of any amount may seem like an impossible goal when there’s debt breathing down your neck.
According to Debt.org, total U.S. consumer debt is at $13.86 trillion.
That includes mortgages, auto loans, credit cards, and student loans. Looking at that figure makes it plausible to believe saving money is a little hard to reach.
But it isn’t.
Look at your current total debt, and make a plan to aggressively pay it off.
Being aggressive with your debt repayment means you will need to sacrifice conveniences until the debts are paid.
Spending the absolute minimum each month and eliminating spending money on expense waste is the key to accomplishing this goal.
I won’t promise that it’ll be fun and exciting. I can promise that you will feel 1000x lighter once your debt is off your back.
With that accomplishment, you can focus on increasing your savings.
Increase your savings
Life is uncontrollable. Things in your life will happen beyond your control.
One of those things you face will be a recession and increasing your savings will help you prep for those hard times.
Starting a savings or emergency account will help deal with those issues that could cause financial hardships, like a recession.
Realistically speaking, it’s easy to save money. But many of you don’t have the mindset of believing it’s an easy thing to do.
If it’s something you really want to do, you find a way to do it. Unfortunately, the process of saving money isn’t always fun.
That makes it something many people don’t feel like doing, even though you know it needs to be done.
Ways to increase your savings can be as simple as reviewing your budget for those expenses that can be cut.
If you have a gym membership, cancel it and workout at home; eat a lot of takeout meals, cook at home more; enjoy shopping online, unsubscribe from email lists, delete the shopping apps and work on saving more money.
The image below is based on a 26-week biweekly pay cycle.
Instead of trying to save each paycheck, which you can definitely do if you want. Save $385 every other pay and you save a little over $5000 total.
Invest in professional development
You might find yourself content with your current employer or employment. That could cause you to cease any sort of professional development.
Professional development is an amazing way to prepare for a recession. Increasing your professional skills gives you the necessary knowledge to increase your demand in a specific field.
Increasing your professional skills helps you remain current with the demands of your career field, or several, and keep your current knowledge fresh and usable.
During the time of isolation, I finished two programming courses that I could not complete while working in the office.
While others at my job were complaining about working from home; I was investing in professionally developing my skills. It is good for my future and will be good for you too.
Grow your own food
Growing food at home isn’t new, but a lot of people don’t do it. Some may think it’s hard to do or some may not feel like they have space or time to do it.
As a former black thumb (I think I’ve leveled up to brown thumb) I can tell you that growing your own food can be rewarding.
During the Great Depression, gardens were a way to make lives easier while producing good food.
For beginners, focus on one food item to grow and perfect it. If you don’t have a lot of space, use your windowsills to grow things like herbs in pots.
Fix what’s broken
Nowadays it’s very common to replace broken items.
However, during a recession, the better option is to fix the items that are broken.
I won’t pretend that I am Mrs. Handy Dolittle but I will admit that it is incredibly easy to fix things in the current world.
You can go right to YouTube or Google and search for how to fix a specific thing.
I didn’t think that I was the type of mom that could fix things.
Over the years, I’ve gotten better at researching how to fix basic household items, rather than hiring someone to fix them for me; or buying something new.
Goods like appliances or electronics are expensive.
Taking a little time to fix something is less costly as opposed to replacing it altogether.
You will save money that can go towards growing your savings and emergency funds.
DIY home essentials
Making your own DIY household products is cost-effective.
Buying the store products can get pricey and sometimes during a crisis, buying basic home essentials isn’t possible.
You don’t want to be stuck with dirty laundry or a smelly bathroom just because you couldn’t purchase items at the store. Simply DIY your home essentials and save lots of money in the process.
Cook at home
During a recession, the best thing you can do to waste money is constantly eating out. Now read that sentence again.
If you are looking to be as prepared as possible to face a recession, eating out will not be apart of the answer.
Meal prep your meals for the week by choosing a couple of hours on a specific day to get your food batched and stored.
Even if you feel like you don’t have enough time to meal prep, cooking at home is more efficient eating takeout very night.
Discover free entertainment
Facing a recession is scary but it does give families time to spend together.
Look for ways to entertain your family without spending money. There are plenty of ways to accomplish this.
You don’t need to spend money to avoid boredom, and there are times when the circumstance doesn’t allow for it.
There are many forms of entertainment that don’t involve spending. Think back to the time before the internet, mobile phones, and such.
You’ll be able to come up with plenty of ways to freely entertain yourselves. And if you can’t remember those ancient times, ask someone.
9 Tips for Preparing for a Recession
Discussing recessions and how to prepare for them isn’t the most exciting way to spend your time.
However, it is a necessary discussion that should be had.
I believe if people spoke more openly about finances, the shameful feelings behind being in debt and trying to pay it off will be removed.
We should be excited about discussing ways to be financially stable especially during these peculiar times.