For at least the past two years, there’s been talk about an impending recession. With the arrival of the Coronavirus, that recession seems even more imminent. As it stands right now, there are approximately 40 million Americans that are unemployed.
Even with this rate of unemployment, people are still spending money! Online purchases have made Amazon’s Jeff Bezos the richest man in America, with a new net worth of 166.3 billion, according to sources.
The rising and falling of an economy, it is not a new concept, and certainly not new for America. 2008 started one of the most devastating recessions that Americans have ever faced. After that, you would think that people would be more aware of their money and how easily it can all disappear, and put measures in place to safeguard their money.
The Obama years were good to America, Trump inherited a thriving economy and some of the lowest unemployment rates the country has seen in a while. However, what history teaches is that the rise comes before the fall.
To sum it all up, be mindful of your finances. Know where your money is coming from, know where it’s going and ensure that you are creating multiple streams of income.
5 Tips to Recession Proof Your Money
- Become an asset to your team at work: If you enjoy your job and want to keep that job during a recession; make sure that you are an asset to your team. Become the linchpin that your workplace needs to keep operating optimally.
- Opportunity fund: During a recession or any other time, there will be opportunities that will help you achieve a goal or even a dream. These opportunities most times will require funding. No, this is not an emergency fund, this is exactly what it says, money set aside to keep your dreams alive!
- Emergency Fund: Emergencies can happen at any time. The more prepared you are for one the better you will recover from one. Especially in the event that there is a recession. Setting up an emergency fund will help you cushion the blow for as long as you can budget for what’s available in the fund. The sooner you start preparing the better.
- Make a plan: If you, like so many others, anticipate a recession, create a plan for this event. The saying goes, if you fail to plan, you plan to fail. A recession will devastate the economy and the people, however, if this is something that you foresee, get prepared.
If you found yourself unemployed and the streams of income you have were to try up, how would you survive? How would you adjust your budget? What things would you prioritize? Make sure you keep your financial and personal documents safe. Make sure you write the plan down, don’t just conceptualize it.
- No New Debt: The very last thing you want to start adding new debt to your credit profile. Your debts will outlive you, even during a recession. A good suggestion is to pay off as many of your debts as possible, especially the ones with the highest interest rates.
This way you can keep more of your money in your pocket in the long run. If a recession were to happen, you want to be able to focus on the necessities and nothing more.
Keep in mind that a recession is a great opportunity to make a come up. If you have money saved, this is the perfect time to acquire assets that you might not have been able to afford before. This is a good time to but just about anything you want if you have the money for it.
Property is a great place to spend your money. This article is not here to tell you how to spend your money, just to help you prepare for an economic recession. Hopefully, you found these 5 tips useful.