Financial experts are using the word recession more and more as they discuss the current economy. What is a recession? It’s an economy that is not growing but is shrinking. A shrinking economy can mean job layoffs, higher food and gasoline prices, a slower housing market as well as a decline in home values.
Many “experts” are predicting a recession. On the other hand, some say we’re in one now and some are even predicting a recession won’t happen at all. As a consumer, what do we do to protect our money during this time of economic uncertainty?
Here are some suggestions and tips:
~ ConsumersReport.org suggests that if you intend to invest in the stock market, look at low risk stocks. Suggestions: Utility stocks and companies which provide daily needs such as grocery stores. They also suggest doing your research before making any investments. You can find stock research reports of web sites such as E-Trade and Yahoo Finance. When in doubt, seek out advice from a reputable broker and do your homework.
~ Many experts suggest paying more on your credit cards to cut down on monthly payments and raise your credit score.
~ Cut back on anything that will save you dollars during the month. Can you cut back on cable, cell phone usage, Internet and other month-to-month expenses? During a recession the key is to spend less.
~ Save more now. Start spending less and placing more and more into savings. A few extra dollars a month now could make a significant difference in the months to come. Get extremely serious about that “emergency fund” you’ve been meaning to start.
~ Here’s the big one – job loss. A recession means the economy is slowing down. That also means more people are being downsized, out-sized and unemployed. It’s better to prepare while you still have a job than to be scrambling if you should get laid-off. Start planning now!
- Look at developing multiple streams of income.
- Start that home based business.
- Begin networking with people who can help you with a job referral should you need one.
- Start honing your job skills and developing new ones. Get training, take classes and start reading up-to-date materials relevant to your field.
- Dust off the resume just in case. Begin updating it now while you’re not in a panic mode.
~ Attitude is everything. Keep a positive and proactive attitude concerning your finances. Live with the attitude, “How many ways can I recession-proof my life and take positive action now.”
~ A home is your biggest investment so take care of it. The down turn in the economy will not last forever. Keep your home looking great and do necessary repairs to help retain its value. And if you’re buying a home, be reasonable and don’t overextend yourself.
~ It’s time to begin sharpening your financial skills. Invest some time, energy and few dollars in your financial knowledge. Knowledge is power and now is a great time to start reading the best-of-the-best financial how-to books. (I have a few suggestions and reviews on this site you may want to look at.)
These are a few common-sense tips to help us thrive during a negative or uncertain economy. Before making any financial decisions do your homework. Talk to financial advisors, read and analyze your options. The goal is to be proactive and not reactive to the economy. Abundance and wealth is built one smart financial decision at a time.
*Please check with a financial professional before making financial decisions. This article is not intended as investment or financial planning advice.