If you stay ready…you don’t have to get ready!! Whether or not a recession occurs, certain personal actions will be beneficial for your future.
Job loss is the most common effect of a recession. This can occur due to a layoff, furlough, or company failure. With many people all experiencing job loss, finding a new job is difficult. For those who keep their jobs, they may experience pay cuts, reduced benefits, and no pay raises. Another major concern is the decline in value of stocks, bonds, real estate, and other assets.
To be ready to cope if an economic downturn occurs, consider these financial strategies:
- Monitor your monthly expenses. Know what it costs to live so there are no surprises. Be ready to pay items that occur only once a year.
- Cut unnecessary spending. Look back at your spending to see what you could have done without. Add up what you could have avoided to make sure you spend less than you make. Possible areas to cut include cable TV, streaming services, gym membership, online music subscriptions, and a less expensive cellphone plan.
- Start or expand your emergency fund. No matter how small, be sure to set aside funds for poor economic times. To build your fund, have an amount automatically deposited in a saving account each month.
- Budget everything. Telling your money where it will go keeps you in control.
- Avoid debt. Just like saving, paying off debt can start small.
- Be in contact with others to discuss possible late payments, reduced costs, cancel services, and other actions to cope financially.
- Maintain retirement savings. Keep contributing to your retirement fund so it will be there when you need it.
For career planning during times of recession, consider the following actions:
- Inventory your skills, especially those that relate to essential work for your current employers and other organizations.
- Expand your skills through online certifications, courses, and training programs.
- Be adaptable. Step up to take on tasks needed within your company.
- Network for freelance work. Connect with others in your industry for consulting opportunities.
- Be prepared for the unexpected. Despite taking these actions, a layoff may still occur. If that happens, expand your skills, update your resume, and connect to others through LinkedIn and community service activities.
For additional information on financial planning during a recession,
- Have students research current economic conditions to determine the status of employment and inflation.
- Have students create a podcast to encourage others to act on the suggestions in the article.
- What are the benefits of these actions during every type of economic situation?
- Describe actions a person might take to better understand potential career opportunities.