Five Ways to Navigate an Economic Downturn
A recession can occur when the economy experiences a decline in spending for two quarters or more.
You deserve a financial foundation you can count on. In times of recession, these five steps can help you keep yourself on firm financial footing:
Stay Calm: Maintain your usual habits of saving and disciplined spending as much as possible. Quickly implement a better strategy if the current one has room for improvement. The best way to reduce financial worry in times of recession is to focus on solutions, instead of fixating on your problems. If you are feeling stressed or having a hard time thinking of a plan-of-attack, a trusted mentor can help you create a doable recession-response plan.
Explore Your Skill Sets: Be open to the idea that you may need to pivot during a recession. Consider exploring other aspects of your professional skill set or research completely new avenues that interest you. A diverse skill set can help you maintain your saving and spending power, in any type of economy.
Use a Budget: It is especially important and useful to track your spending during a recession. If you already have a working budget, you will likely need to review it to help yourself establish any necessary financial protections. Your budget can also help keep you on-track with your long-term goals, regardless of the economic downturn.
Plan for the future: In the event you don’t have one already, remember this for when you’re able to finally get a grip on your finances: Create an emergency fund for yourself. This nest egg will help you cover unexpected expenses and keep yourself comfortable in the case of income loss or interruption. Saving a little each week is all it takes to get this fund off the ground!
Reduce Your Debts: The sting of interest can be especially painful during a recession. Push yourself to pay down your debts as much as possible each week. If you are on the verge of going into the red, consider pursuing an additional income source. Your credit score and stress levels will thank you!
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