Table Of Contents
- 1 How To Survive An Upcoming Recession
- 2 What Is A Recession?
- 3 Is A Recession Coming?
- 4 Here Are 13 Tips On How To Survive An Upcoming Recession:
- 4.1 1) Save up
- 4.2 2) Have your resume ready
- 4.3 3) Learn new skills
- 4.4 4) Listen to that little voice
- 4.5 5) Pay off any debts you have
- 4.6 6) Get a medical check-up
- 4.7 7) Don’t wave your stocks investments goodbye
- 4.8 8) Buy stocks
- 4.9 9) Don’t even look at your retirement account
- 4.10 10) Sell gold and other things you don’t need
- 4.11 11) Start a business at home
- 4.12 12) Upgrade your passive incomes
- 4.13 13) Create an emergency plan
- 4.14 Here are some of the top tips on how to survive a recession:
How To Survive An Upcoming Recession
Chances are that the world will face a recession in the upcoming months or years. Recession is a scary word, and most people don’t know how to survive one.
If you’re wondering how to survive an upcoming recession, you’ve come to the right place. Below we’ll be reviewing what a recession is and what to avoid to survive an upcoming recession.
What Is A Recession?
A recession happens when the economy turns down. Businesses lose money rather than make it, and the industry goes broke. Stocks and the market lose a great amount of value. Most employees will be fired or face a wage reduction as a result.
Long story short: the economy gets chaotic, everyone suffers from it. SOME BUSINESSES GO BROKE AND CLOSE INDEFINITELY, AND SOME PEOPLE MIGHT EVEN LOSE THEIR HOMES. Yes, it’s scary.
Is A Recession Coming?
The chances are that we will face a recession soon due to Covid-19 and the Russia-Ukraine situation. But DON’T PANIC JUST YET. NO ONE KNOWS WHEN THESE THINGS HAPPEN, not even economists. They might form an idea, but no one can know for sure.
Also, these things happen. They’re no good for anyone, but they are sometimes unavoidable. That’s why it’s always a good idea to be prepared for the worst. GOOD NEWS: YOU CAN PLAN AHEAD AND BE PREPARED just in case.
Here Are 13 Tips On How To Survive An Upcoming Recession:
Plan ahead of an economic disaster.
If you’re smart enough and follow our tips, your money and family will be as safe as it gets in such a situation. Let’s take a look.
1) Save up
Let’s start with the basics. Save enough money to cover at least six entire months of expenses. Financial and economic experts recommend you to have these months of expenditures covered before embarking on other activities, such as investing in stocks.
It can be overwhelming to think about the amount of money six months of expenses means. But don’t get overwhelmed. Anything is better than nothing. Raising $2k instead of $20k is still better than nothing.
2) Have your resume ready
We have to be realistic. If a recession hits, many people will likely be laid off. Data from the 2010 recession shows that young people were laid off more frequently [https://www.epi.org/publication/bp258/] . Maybe it was due to less experience in the company, or the profit they made wasn’t as good.
Anyway, if you are starting in the workforce or think your company may lay you off, you should have an up-to-date and attractive resume at hand. Should the company fire you, you will have to look for a new job in an upcoming odyssey.
3) Learn new skills
This tip goes hand in hand with the previous one. If you have to relocate in the future, or the world changes, you will have to adapt to the new reality. While you still have time and resources, try to learn a new skill.
You could learn to program, analyze data, or manage your personal finances (quite useful in a recession). It doesn’t really matter what the skill is, but how you can implement it in real life.
Employers look for proactive people who are constantly learning and improving. Plus, you will be more prepared for anything that comes your way.
4) Listen to that little voice
Your conscience can warn you about more things than you imagine. Do you think you are spending more than you can afford? Listen to that little voice and heed it.
If you think there is something you could do better, do it. It’s better to save on treats now than wait for an economic crisis and find yourself in debt or bankrupt.
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5) Pay off any debts you have
This advice applies to any time in your life, especially during a recession. Banks are very reluctant to lend or extend credit during such an alarming situation.
If you have debts on top of that, things can get complicated for you. It’s better to pay off your debts as soon as possible. And on the same basis, if you are thinking of buying something financed, think again. If you don’t have the money to buy it right away, you can’t afford it.
6) Get a medical check-up
If you live in the United States or another region where healthcare is private, now is the time to get checked. If your job includes health insurance, it’s too late to make an appointment.
Imagine your company lays you off. Given the state of healthcare with the pandemic and other health problems, any appointment or treatment could cost you an insane amount of money. Take advantage now.
7) Don’t wave your stocks investments goodbye
I know what you are thinking. _” I don’t have any money, why should I keep wasting it on stocks?” _Often the market crashes before an economic downturn, but then the value goes through the roof.
If you want to see the benefits, you must stay on board. I know it may sound a bit contradictory, as does the next piece of advice. However, we assume you have followed rule #1 of investing: never risk more than you are willing to lose.
You’re likely to lose money in a recession (even if you win it back later). Hopefully, you were already willing to risk and lose your capital.
8) Buy stocks
We continue with the previous advice. People are very emotional and easily frightened. They will sell their stocks at the drop of a hat, and you may be tempted to do so yourself.
But now is when they are cheaper than ever. And when everything normalizes again, you can make a huge profit. That being said, _never _invest the money you need to eat or educate your children. Priorities come first.
Stocks that Kiplinger recommends during a recession:
Church & Dwight
Proctor & Gamble
Service Corp. International
9) Don’t even look at your retirement account
I know, it can be tempting. But unless you need it for food or basic necessities, don’t take money from your retirement account.
You haven’t been saving up so hard only to wave goodbye to your retirement dream. This account should be your last resort.
10) Sell gold and other things you don’t need
During a recession, it will be challenging for people to buy second-hand or things from you that you no longer need. But you can always try, at least a few months before things get worse.
On the other hand, gold will always be a safe investment. That’s why its prices go up a lot when there is an economic crisis. If you have gold jewelry, watches, whatever, a recession may be the right time to profit from them.
11) Start a business at home
Maybe you get fired, maybe you don’t. But it’s always a good idea to start a home-based business when things go wrong. If you have time and resources, try learning to code or copywriting. These skills will be demanded even during an economic disaster.
Have you always had an idea that you never tried? Maybe it’s time to do it. Check you don’t need to make a huge investment or take risks, though. We already discussed that banks won’t have your back during times like these.
12) Upgrade your passive incomes
Now that there’s still time, invest in assets, real estate, or whatever type of passive income you prefer. If you want to know how to prepare for a recession, the best way is to save up money. But money is hard to earn unless it’s passive income.
We discussed previously the benefits of investing in stocks and holding your assets during a recession. No matter how bad things look, you already lost the money. You will probably gain it back.
During the good times, though, passive income is always better than the money you earn hard working. Invest in stocks that pay off decent dividends and save up as much as possible.
13) Create an emergency plan
You are already doing so by reading this article. Nevertheless, you should plan an emergency program just in case. What expenses will you cut down on should there be a recession? What debts should you pay today to avoid feeling overwhelmed tomorrow?
Once you discover the weak spots in your personal finances, you can take action. Reduce expenses, save up, pay off debt, and so on.
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Remember that no one knows when an economic recession will come. Of course, the more prepared we are, the better.
But people act in so many different ways when the decision time comes. You may have read all of our tips yet sell all your stocks when the market crashes down.
Please keep your head cool. Act as things go along, and never jeopardize the health or education of your loved ones.
Here are some of the top tips on how to survive a recession:
* Save up while you can.
* Pay off debt as soon as possible.
* Don’t sell your stocks and assets out of fear.
* Buy stocks low and profit when the value goes up.
* Cut down on expenses.
* Make an emergency plan.
End: 13 Tips On How To Survive An Economic Recession
Disclaimer: This article is meant for educational purposes only and is not intended to be construed as financial, tax, legal, or insurance advice.