Economic recession is sometimes inevitable. Therefore, you should be financially prepared to deal with it. Here are 6 tips which you can follow in order to make your financial life recession proof.
- Save more and do not incur new debt – As already mentioned, you should be well prepared especially when you can sense that an economic downturn may occur. Therefore, in such a situation, you should try to save more, actually as much as you can, in order to prepare yourself for the rainy days. It will be a foolish idea to incur new debt at this point of time. Instead, try to pay back the debt you already have, so that you are well prepared for the rainy days.
- Try to reduce your monthly expenses – It is a common trend to increase your monthly expenses during the good times. You might want to shop at expensive stores, buy more branded products, etc. However, you should always keep a check on your expense and do not make it a habit of buying only the expensive things, when alternatives are available. Therefore, at first, you need to plan a budget and review how much you’re spending and on what items. It will help you plan a suitable budget in order to reduce your expenses.
- Buy a house if you can afford – Buying a house in the sluggish market is better than spending your money on rented apartments. However, your financial condition should permit you to afford the down payment and the monthly mortgage payments. Along with this, make your mind to stay at the property for some years (at least for 2 years) since the house may not appreciate quickly.
- Make yourself inimitable at work – During the time of recession, it is very much necessary to make yourself irreplaceable in your job. You need to go that extra mile by offering extra duties, having excellent attendance and also completing assignments on time or it’s even better to complete it before the deadline. Also, you should update yourself with the current skills and make yourself aware regarding the company trends. All these will help you secure our job during the times of recession.
- Think about alternative healthcare options - You should be well prepared for the unfavorable situations. Therefore, you should always plan well ahead that what will happen to your healthcare options if you or your spouse lose your jobs. If you are laid off, you can continue with your current employer’s healthcare but for a limited period of time. And, if you are covered through your spouse’s healthcare plan, then you should look for options in case he/she loses his/her job.
- Track your credit report and score – Your credit reports and scores are important irrespective of whether or not it is a sluggish economy. If you have a good score, then you’ll be able to take out a loan at suitable term and conditions, which, in turn, will help you enjoy relatively lower interest rates. Therefore, pull and check your credit reports regularly to have an idea and to make it error free. Also, try to add more positive items in order to reduce the effect of negative items in your reports, if any. To do so, make it a point to pay your bills on time and to make the necessary payment at every billing cycle.
Following these tips will help you have a good track where your money is going and you can save dollars in order to prepare yourself for the rainy days. Doing so, you will have control over your finances and can make your financial life recession proof.