A recession is when there is a dramatic decline in economic activity for an undetermined period. This may result in job loss and uncertainty.
However, there is no need for alarm, as there are ways to survive a recession by saving some money and making money on the side. The following six suggestions are ideas on how you can do both.
So let’s get to it.
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Track Where Your Money Goes to See Where to Cut Back
Spending small amounts seems harmless, but the expenses will build over time. You can track your money to see where it goes by looking through your accounts. After tracking it, you can sort your finances into categories and see which areas you can save.
Ways to categorize your finances include:
A spreadsheet
A Phone app
A piece of paper and pencil
Color coding your statements
Several methods are available to track and categorize where your finances go, and how it’s accomplished relies on your preference. The most critical piece of it, however, is that you discover where surplus spending is happening and then are able to cut it out. For example, if you spend a considerable amount eating out, try meal planning and buying groceries instead.
Put Aside Extra Cash When You Have It
You may have extra cash if you cut back on expenses and don’t put money where you don’t need to. Although the most tempting thing to do is spend it, putting it aside and saving it may protect you in the future.
Having a savings fund (we recommend a high-yield savings account) has a variety of other advantages, whether the economy is experiencing a recession or not. These include:
Savings provide security for emergencies
The fund is a financial cushion for times of uncertainty or employment loss
It’s a good habit, so you’re prepared for anything.
It will never hurt you and always help to have extra money in the bank.
Look For Deals On What You Need; Don’t Spend on What You Don’t
In today’s world, you will always need to exchange money for what you need. There will sometimes be things that you want but don’t necessarily need, and it’s gratifying to buy those things anyway.
However, during a recession, it’s a wise decision to only spend money on actual needs for you and your family, which include:
If at all possible, it’s good to look for a deal in order to spend less on these needs than you usually would.
Additionally, hold back on big purchases (such as a bigger car or a new dining room table). Unless they are absolutely necessary, large purchases may hurt your finances more than assist them.
Pay Off Debt Instead of Adding To It
Understandably, there are circumstances in which getting into debt may be your only option. However, being able to pay down debt is the ideal situation. The best debts to pay off first are:
Credit card debt
Student Loans
Auto Loans
Other personal debts
Reconsolidating credit cards to a lower APR will help you with interest costs in the long run. Also, starting with the smallest debt and watching it disappear is also a great way to build motivation.
Make Additional Money on the Side
We discussed the approach to saving money during a recession, but there are also strategies to implement that will help you bring in additional income.
Start A Career or Side Hustle
No matter what is going on in your life at this moment, it’s never too late to start a career or side hustle, even if it’s only part-time to fit around your responsibilities. The following examples are great places to begin when looking for a career:
Learning how to do beauty work (such as haircutting or nails)
Becoming an online teacher
Digital Marketing
It’s always possible to bring in more income while working around your schedule and doing something you enjoy.
Sell Belongings You Don’t Need Anymore
If you no longer have a desire or need for an item, someone out there will. When selling it for a good deal (for both you and the potential buyer), it will help bring in supplemental income. Ideas for some objects to sell are:
Clothes you don’t wear/fit into/need anymore
Indoor furniture that’s in good shape (such as couches, dressers, tables, desks, bed frames, etc.)
Lightly used cookware
If you have a hobby that creates something (like knitting scarves or flipping furniture), you can sell your completed work.
Kid toys
Outdoor tools (such as a lawn mower, grill, or patio furniture)
A used car
Selling something may help both you and the buyer because, as you receive income, they get a deal.
If you find that you enjoy sales after getting a taste of it, consider getting into a market where you can sell things you enjoy. For example, if you love cosmetics, you can sell things like cleansers and all in one creams.
Offer Your Unique Services
Everyone out there has diverse talents and services that they can offer. These comprise of (but are not limited to):
These unique and distinctive capabilities can be shared through advertisements in your geographical area, blogging (you can use services like RankIQ to climb to the first page of Google), or a YouTube channel you create. Through planning and research, this can be a great way to bring in additional financial support.
Wrapping Up
During a recession, there are many great ways to save and secure money. Some ideas on how to do so are tracking how you spend your money, finding ways to cut back, putting aside extra cash, eliminating debt, and looking for deals on what you need.
Additionally, if you’d like to bring in financial aid during a recession, this will also greatly help you. This can be done through starting a career or side hustle, offering unique services using available platforms, and selling belongings you may not need anymore. Implementing these practices will assist you during uncertain financial times or a recession.
