In 2008, the United States was wrecked by one of the worst recessions since the Great Depression – dating back to the late 1920s and 1930s. Many people were severely impacted, causing an insane amount of foreclosures, rising percentage of unemployment and an overall state of frenzy for many families. The after-effects haunted many, resulting in years of financial repair. I know what you’re thinking, “how can I make sure I’m protected no matter the circumstances?” Take a look at the four tips below to stay ahead of a potential recession, maintain your sanity, and preserve your finances in the process.
Create a plan of attack to pay off credit cards
One of the best things you can possibly do is reduce debt by any means necessary. Make a list of all credit cards, including all interest rates. You can either decide to start with tackling the lowest balance first or the credit card with the highest interest rate. Either way, make sure you commit to reducing your debt as much as possible. Living within your means alleviates the pressure many feel when the economy starts to shift.
Re-evaluate your budget
Often times we believe there’s not much ‘slack’ in our budget – when honestly, we haven’t taken the time to evaluate how much money is being spent month over month. Are there are subscriptions you really don’t use? Are there too many funds being spent on entertainment or eating out? Revisit your bucket for all of these items and transfer the remaining balance to your savings or toward reducing debt. Budgets aren’t meant to be rigid; circumstances change along with the seasons. If you’re feeling uncomfortable about this keep in mind that one year of financial focus can change your life.
Turn your talents into a side hustle
What is that one thing your friends consider you the go-to person for? Any talent you have can easily be monetized. Use social media as an outlet to gauge the interest of others while ramping up your clientele. Start with close family and friends – this becomes a great way to earn extra income while doing something you actually enjoy.
Boost your emergency fund
For every dollar that isn’t assigned in your budget, your spending habits will do the assigning for you. Please be intentional with designating a set amount every pay period to your emergency fund. Even if it’s $20 each pay period – start somewhere. The amount can be adjusted over time as your comfort level (and bank account) increases. Set an aggressive goal. While you may hear what others are doing or should be done, focus on what makes you feel most comfortable. This could range from six months of living expenses (half a year), or a years worth of living expenses or income.
Don’t delay. Take charge of your finances today. #recessionoverruled