Prepare for a Recession

Prepare for a Recession

With recession on the lips of every economic analyst it is no wonder that people are scrambling to figure out how this decline will affect them personally. This article will provide tips on how to financially prepare for the inevitable recession approaching.

The first thing we should be doing to prepare ourselves for a recession is to create a safety net. This can be done in the form of a savings account with enough money to cover six months of living expenses. The money should be in a savings account so that you can access it at any time in case of an emergency, such as layoffs, sickness, etc.

The second most important thing we should be doing is to cut costs where ever we can. This can be done in numerous ways. Eliminating a second or third vehicle is one. Minimizing your energy bill is another. You should begin this process by writing down everything you are bringing in and everything going out. You will likely be amazed at how much money you are spending on things you don't really need.

Need brings us to the third thing we should be doing. With your list of what is coming in and going out, also keep track of your "needs" and your "wants". During this volatile time in the economy, you will want to eliminate the wants and find ways to cut costs of the "needs". Here are some suggestions for doing just that: As an alternative entertainment, visit the local library and check out a book or two. There are a variety of great dvds available to loan at no cost, as well. Get rid of all the extra channels on your cable that you aren't watching, anyways. Clip coupons, and here's something new - USE THEM. But, only buy things you will use normally. Offer to carpool to work, kids soccer practice, grocery store, etc. Do you really need that mocha latté from Star bucks every morning And afternoon? Maybe you can cut down to one cup a day or eliminate it all together. There are endless ways to cut down on your daily expenses. You just need to be determined and decide that you want to be an ant and not a grasshopper. You'll be glad you did.

Many companies go under during a recession and many down size. You may want to touch up your resume and keep your networks up to date. Even if you couldn't imagine yourself not working for company ABC, you never know when life or a recession will throw you a curve ball. Being prepared is the best advice I can offer.

Now, that you've figured out where to cut costs, it is time to increase your income. Look around your home for things you can resell on Ebay or have a garage sale. Take classes to enhance your skills and look for a better job, but remember that the last one hired before a recession, is usually the first one to be let go after it hits. If you have teenagers, put them to work. At least it will cut down on your "extras" expenditure and with homework and a job, they won't be using lots of free time to rack up text messaging bills.

To review, the best way to prepare for a recession is to create a safety net of a savings account with six months of living expenses. Cut costs wherever you can. Think job security by updating resume and skills and keeping good networks. And, increase income by any legal means necessary. If you implement these tactics you will be on the right track to preparing for an upcoming recession. Even if we squeak by without fully experiencing a recession, you can rest better at night knowing you are little more financially secure than you were the day before. Now isn't that a good feeling?

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