Today's guest article, 7 Financial and Mental Survival Tips in the Event of a Recession, is written by the owner of the financial help website "Ted Knows Money". Ted James specializes in private, one-on-one coaching and counselling sessions to help people take control of their finances.
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A recession can be scary, especially if you haven't prepared for the possibility of financial changes in your life. When the threat of a recession is very near, it is time to start formulating a plan to help you get through it as comfortably as possible. Consider these tips to start creating your recession response plan.
1. Build an Emergency Fund
Start building your emergency fund right away and try not to limit yourself to a single method. You can create a savings account and make deposits every payday. Create a budget to help you manage savings and work as much as often as possible while you can. Additionally, save in small ways as well. For example, drop your change and small bills in a jar every afternoon. Deposit it when it starts to get full.
2. Go Back to School
Getting a degree in a recession-proof field with a high demand for workers is a great way to establish job security. For example, you could work in the medical field or in IT. You can find careers that offer fast online degrees with online IT certifications to make you more marketable once you’ve completed your degree.
3. Find Comfort in Prayer
When people think of self-care, they often think of activities like getting enough sleep, eating a healthy diet, and exercising regularly. However, prayer can also be an excellent form of self-care. Prayer can help to calm and focus the mind, providing a much-needed break from the anxieties and worries of the day. Additionally, prayer can help to promote a sense of peace and well-being. It can also be used as a tool for asking for guidance or clarity on a particular issue. For many people, prayer is an essential part of managing anxiety or other emotional issues. It can provide a sense of comfort and peace during difficult times and help to refocus the mind on what is truly important.
4. Start Your Own Business
Starting your own business may seem counterintuitive, but there are effective ways to make money with little overhead, even during a recession. The key is to invest in a business idea that is recession-proof. For example, accounting, repair services, and childcare are things people will always need, even when inflation is high and job security is diminishing.
5. Refinance Your Mortgage
Is your mortgage a primary concern? If you plan on staying in your home long-term, refinancing is a good option. Keep an eye on interest rates and talk to your lender about refinancing when rates drop. You just need them to be better than your current rates.
6. Start Cutting Costs
Research shows that you can cut down your monthly bills significantly if you make small changes in your everyday life. For example, start buying generic versions of items you use regularly, such as household cleaning supplies and medications. Avoid spending money on things you could make on your own. For example, you can DIY pet food, multipurpose cleaners, dog food, and skincare.
7. Avoid Panicking About Investments
A natural response to the threat of recession is to liquidate your investments so you have cash on hand. However, that isn't always necessary if you can afford to wait it out. Talk to a financial advisor before you make the decision. You can also visit Money Solutions Online for financial resources and money management tips.
Panicking and worrying about the future is not an effective way to get through a recession. From starting a recession-proof business to refinancing your mortgage or going back to school, there are always ways to generate an income. Many of them are even great tips to implement when things are going well.
Featured image by Karolina Grabowska @ Pexels