How to Survive a Recession
Many believe that recessions are just another word for “good times.” You see people spending money willy-nilly like there’s no tomorrow. On the contrary, the country usually gets pretty gloomy as soon as a recession starts. The markets crash, and jobs dry up. So it becomes vital not just to save money but to spend it wisely too — on items that won’t go out of style anytime soon.
How to Survive a Recession According Helen Lee Schifter
1 Clean Up Your Finances
According to Helen Lee Schifter, if you have a job, you’re in luck: you’ll probably be able to keep it no matter what. But if you lose your job or your company is downsizing, you must protect as much of your financial security as possible. Start by looking at the state of your finances. Pay them off if there’s anything that could prevent a smooth transition to another employer (like unpaid debts). There’s no point in moving money around when you’ve already started on the wrong foot with creditors. Next, make sure that your bank account and credit cards stay current. If they’re too high in debt or not regularly used anymore, close them down and find new ways to pay for things.
2 Get Back to Basics
When times are tough, the temptation is to start spending money mindlessly. However, it’s essential that you stay aware of your budget and don’t buy things that are not essential. Things like clothing, unnecessary electronics, and other luxury goods are just extra weight on your financial belt. Giving up these items will make the transition into another job more accessible — and you won’t resent the “no more shopping” rule as much.
3 Buy When You Have to, Rent When You Can
Sometimes, you have to get creative when it comes to spending. It is valid for the job market, where some companies expect new hires to be willing and able to put up with temporary working conditions. If you’re lucky enough to land an excellent flexible contract, that’s fantastic. But even if you aren’t so fortunate, there’s nothing wrong with renting instead of buying something now and then. Renting helps keep your assets at a constant level in case an emergency arises. Another option is borrowing against your support — it’s essential that you avoid debt as much as possible if possible (otherwise, things can get ugly quickly). But borrowing a car or renting a room from someone else can help you out and keep you from losing control of your finances during a recession.
4 Seek Comfort in the Basics
It’s important to remember that comfort doesn’t mean luxury. Don’t be tempted to buy more expensive food because you feel like you should, or purchase more costly clothes when last semester’s wardrobe will do just fine. If something is essential to your survival, spend it. Otherwise, try saving money instead of spending it (at least until your finances are stable again). That way, Helen Lee Schifter assures that you’re not just sleeping on the couch but on a bed that costs three times cheaper.
5 Be Prepared
Think about how you’d deal with an emergency — for instance, what to do if there’s a fire or earthquake. When these things happen, you must have a plan in place. These plans can be simple, put together an emergency kit that includes some nonperishable food and other necessities to ensure you don’t go hungry with the rest of the world.
If you’re prepared, you’ll do better in the job market and have a better chance of making your way out of a brutal recession. It means keeping your money in check, not wasting it on goods that’ll only go out of style and ensuring that you can survive a rainy day. Once you’ve done that, it’s time to get to business!