- 6 Ways to Improve Remote Working - September 22, 2020
- How to Save Money When Renovating Your Porch - September 21, 2020
- How to Get a Clean Start for Organizing Your Finances - September 21, 2020
If you ask Donald Trump, the recession will hit the country only if the citizens of the country don’t reelect him in 2020. But economists have a different prediction. Around one-third of economists feel that the recession is likely to hit the country by the end of 2021. And, according to the studies of MIT Sloan School of Management and State Street Associate, there’s around 70% probability that recession will arrive in the country in the next 6 months.
The debate on this subject will go on. Unlike the weather forecast, no one can actually predict the exact date when the recession will hit the country. But it’s true that recession will strike the nation at some point. It may happen after a year or it may happen after 10 years.
So what is recession precisely? How can you survive it? Let’s find out.
What is a recession?
A recession is a prolonged phase of the economic downturn that lasts for more than 6 months. Usually, all industry and trade activities are low during this time, which triggers a negative GDP.
How can you survive a recession?
Recession is like a cyclone. There is no way to avoid it. You can just try to reduce its impact over yourself. Here are a few simple steps you can take to survive the recession.
1Try to become a valuable employee: The unemployment rate went up to 10% during the last recession in 2008. This implies that almost 9 in 10 people were not working during that time.
There is hardly any job security during a recession. People can easily lose their jobs during that time. This is why it is essential to become a valuable employee at work. Enhance your communication skills, increase your productivity, and take up new projects to be a versatile employee. This way, if your boss decides to reduce the manpower, then also your name won’t be in the elimination list.
2Boost your emergency fund: Nothing is stable during a recession. Anything can happen and so you need to be prepared beforehand. Boost your emergency fund so that you can cover your unplanned expenses even when you don’t have a job. Recession is the period of transition when people change jobs or lose jobs. Some people even work without any pay hike. It’s such a tough period. An emergency fund containing 6 to 9 months’ worth of living expenses can give you financial and mental peace amidst the economic uncertainty.
3Reduce your debt burden: Once you have a cash reserve of a few months, you should try to reduce your debt burden. When the budget is tight during the recession, you would want to spend money to cover your living expenditures and not to pay high-interest debts. You would need money to maintain a decent standard of living. Paying high-interest rates on debts would create additional pressure on you. If you miss payments, then your credit score would fall and it’ll be tough to qualify for loans at a decent rate.
Try to pay back your creditors as soon as possible. Speak to credit counselors and choose the right debt relief option for yourself. It will help to cut down your outstanding balance or lower your interest rates. If you choose the debt settlement option, your payoff amount will be reduced. And, if you choose debt consolidation, then your interest rate will be slashed. In both the debt-relief options, you’ll save money.
4Get a side hustle: If you really want to keep your financial life secure, then it’s apt to do everything to inflate your monthly income. There are plenty of ways to increase your income, and this includes getting a side gig. Just type ‘part-time job’ in the Youtube search box. You’ll get tons of videos on how to earn dollars from home without investing any extra money. Watch those videos to know about the websites that help you to earn dollars from home. But at the same time, don’t neglect your present job because that is the primary source of your bread and butter. Give 100% dedication there too so that your employer is compelled to give you a promotion.
5Uplift your FICO score: It seems trivial to be anxious about your FICO score when the economic condition of the country is weak and frail. But what if you need to buy an apartment when the economy is down? Have you ever thought that it may be the best time to buy your first home since the price is down? The only thing that can stop you from buying your first apartment is your credit score. The loan approval process is complicated during the economic downturn since the entire country is facing a financial crunch.
Lenders tend to give money to the strongest home buyers. This implies that if you don’t have excellent credit, you may not qualify for a home loan. The same thing is applicable when you want to take out a debt consolidation loan for repaying personal loans or student loans.
Always look at your credit report to find out if there are any errors. Obviously, you wouldn’t want to see a drop in your credit score due to some fraudulent activities. So take precautionary steps beforehand.
The aforementioned steps will help you to keep your financial life stable even during the toughest economic situation. So without worrying too much about how the economy is doing, take the aforementioned 5 steps to upgrade your financial life.
Stacy B Miller is a writer, blogger, and a content marketing enthusiast. Her blog vents out her opinions on debt, money and financial issues. Her articles have been published in various top-notch websites and she plans to write many more for her readers. You can connect with her on Facebook and Twitter.
All content on this site is the property of Taxbot, LLC, The Profit Junkie Podcast, or the author. You may link to any article that you wish, or share via the social media buttons below. However, please do not copy articles or images for use on other sites without express written permission.