Crisis and recession may occur at different historical times for each country. Unfortunately, when a recession strikes, not much can be done. The only thing we can do is to work on it ourselves. That is, as much as we can make our financial resources resilient to the recession. be with us. In this article, we introduce 10 effective steps to successfully complete this course.
Howard Dorkin, finance specialist and chairman Debt.com Says:
“Look at counterterroring your life like counterattacking your home. If the tornado is a few days away from you and I ask you where the tornado guards are, the worst answer will be, “I think I have some in the garage, but I may need to buy a few more.” It is too late, and any unprotected window is a disaster. The recession is the same. “The only difference is that the breakdown lasts for months and lasts for years.”
To compile this step-by-step guide to maintaining financial stability in poor economic conditions, we have reviewed the views of various economists.
1. Do not panic
Recession is (unfortunately) normal. Keeping your mind calm is the first step in counteracting your financial resources. When you are scared, the brain can not make smart, long-term decisions. This peace of mind, in addition to helping with self-care, makes you realize that stagnation is inevitable and transient.
“The economy is in season and it is winter recession. “After each sunny summer, the leaves of the trees fall and the days get shorter and darker.”
Ernie Lowry, a personal finance expert and author of The Young Bankrupt Tests Investment, points out that “the stock market is periodic and there is a recession everywhere.” This view may not be very gratifying, but at least we comfort ourselves by knowing that the world is not over.
2. Organize your emergency savings
Alexander Lowry, Senior Fellow in Financial Analysis at Gordon College America, says:
“Studies have shown that many people can not afford the minimum monthly savings. If you could not afford it now, what would you do in the face of adverse economic conditions? You may have to go into debt or lose your home. “So be sure to set aside monthly money for emergencies.”
Most financial experts recommend that you set aside about 3 to 6 months for your day. According to Alexander Lowry, this goal may be funny for young people, but they should try to save at least as much as 1 month. “It’s okay to start small, but you have to set aside a monthly salary,” he says.
Save as much as 3 to 6 months.
3. Reduce your debt
“After setting aside emergency savings, the most important thing you can do is get rid of debt,” says Alexander Lowry. Ernie Lowry agrees, adding: “Debt relief is really helping to ease the pressure in difficult economic times.”
4. Have two budgets: one for today and the other for hard days
If you have not yet written a budget, now is the time to start working. This can be incredibly tedious, but there are free services that can help.
“There are secure online programs that do half the work for you,” says Durkin. Just type a few numbers. “You can easily plan a budget for yourself.”
In addition to the budgets you write for today (ie normal economic conditions), you should also have budgets for difficult times and recessions.
“Hard day budgets come into play when incomes fall sharply,” says Ernie Lowry. “This budget focuses on regulating vital expenditures and aims to provide enough money to cover those necessities.”
When setting a budget for your difficult days, you need to consider the worst case scenario and write down the necessary expenses. Expenses such as rent, daily purchases and transportation costs are included in this list. Expenses that should not be on this list include club and restaurant expenses. It is better to hope that we will never need to implement this budget, but having it is definitely useful.
5. Have diversified investments
“Personal finance writer and co-founder of Boomer Benefits says:
“You have to invest at least 40% of your cash equivalent in monetary markets such as stock exchanges and short-term or long-term bonds. The other few percent must be in the form of shares in order for you to make money from it. If you are young and still have time, you can also think of averaging the cost in Rials in record time. You may buy stocks when prices fall, but you can also buy stocks when prices rise. This will increase your total capital. “You need to focus on your long-term goals, not the current economic situation.”
6. Keep your retirement plan up to date
“Keep saving for retirement even during a recession,” says Ernie Lowry. “Do not regret investing in pension insurance for fear of recession.”
Ernie Lowry recommends that you consult your financial planner if you are about to retire. “Let an expert look at your retirement strategy for at least one session to make sure everything is working out.”
You can also buy stocks or bonds. But Logan Elk, accountant and founder of Money Done Right, a personal finance site, recommends that if you retire in the next year or two, you should not spend more of your money on stocks. It is better to have your money on hand so that you can better plan for retirement. “It may be better to invest your retirement savings in more stable ways, such as bonds,” he says.
7. Use savings apps
If you still do not have cost management applications and browser plug-ins to do this, now is the time to download them. They help you adjust from your daily expenses to your savings plan.
8. Increase your income with the second job
“Have multiple sources of income,” says Lowry. “For example, you can travel part-time, become a babysitter, sell goods online or even work in a shop.”
Having a second job will also help you take the second step (save more).
Says David Cahill, finance specialist at FinanceSuperhero:
“Having a steady second job and giving up your second income will help you increase your emergency savings faster. “Also, if you lose your job in a bad economic situation, you can count on this extra savings.”
9. Invest in your skills and expertise
Many people lose their jobs during the recession. Always keep your resume up to date. Update your LinkedIn account. Always be ready to show your abilities and skills to employers.
“Buck,” says David Buck, a personal finance expert.
“You may need to strengthen all your current job skills and, if possible, learn new skills in other areas of your job. It is possible that in bad economic conditions, companies will adjust their workforce. “You have to prove that you are valuable in other areas in addition to your current career.”
10. If you owe a lot, ask for help
“Life and Debt: A New Approach to Financial Prosperity,” says Leslie H. T. Tyne, a finance lawyer and author:
“After all, your mental health and finances are just as important as your physical health. If you get sick, see a doctor. So if you have financial problems, you should also consult a financial specialist. Do not be ashamed to ask for help. “Having an expert by your side makes you feel less stressed.”
You do not have to pay much. There are many financial consulting firms that offer free or low cost advice.