Feb 15, 2023
Written by Amos Faulkner of Do Money Well
Uncertain economic conditions might be leaving you feeling stressed about your future. With the right approach to financial management, you can rise above simply surviving a recession - you can thrive. The Association for Financial Professionals Western New York explains how to make it through a recession while staying financially stable.
Create a Reasonable Budget
When you’re looking at a possible recession, it’s time to tighten up your budget. You might not even realize where you’ve been overspending until you start tracking all of your income and expenses. To keep all of your financial data organized, you can use an Excel spreadsheet. You can even insert PDFs of invoices or bills into your spreadsheets so that you don’t lose track of these important documents.
Invest in a Home Warranty
In terms of staying on budget, one way to save money is by purchasing a home warranty in case there's a need for costly repairs. While homeowner’s insurance only covers damage to your home's structure, theft of belongings, and injuries that happen on your property, a warranty covers you in case home systems or appliances break down. This annual renewable contract can help to determine what the costs are for breakdowns to your heating, cooling, electrical, and plumbing systems, along with appliance repairs.
Side Hustle Ideas
You might be worried about facing layoffs at work or having your hours reduced. If you’re concerned that you could lose your primary source of income, it’s time to start a side hustle for peace of mind. Ideally, you’ll want to choose a business idea that is recession-proof. For example, you might want to offer babysitting, start a repair service to tackle minor home maintenance or car repairs, or start working online as a freelancer. Side hustles like these can all be quite flexible, allowing you to keep working at your current full-time job without interruption.
Boost Your Value at Work
If you’re concerned that budget cuts at work might lead to job loss, it’s time to think about how you can establish yourself as one of the most valuable members of the team. You want to ensure that you’re essentially irreplaceable at your company to reduce your chances of being laid off. How can you accomplish this? Meratas recommends continuing your professional development by learning new skills and programs, going beyond your manager’s expectations, and cultivating deeper relationships with your coworkers across departments.
Go Back to School
Wrapping up your education is beneficial in a number of ways, the most obvious being a choice to sharpen your skill set. Look for an online program that also offers industry certification exams to make yourself more marketable. For example, if you're interested in pursuing a career in IT, earning a degree along with IT certifications will give you more opportunities and skills.
Lower Your Mortgage Payments
Chances are, housing takes up a huge percentage of your monthly budget. If your mortgage payments are leaving you stretched thin, you might be able to refinance while interest rates remain relatively low. By refinancing, you may be able to secure a lower rate and more beneficial terms than your current mortgage. However, it’s important to note that if you’re not planning to stay in your home long-term, refinancing might not be a good option. Talk to a mortgage advisor at your lender’s office if you have any questions.
Have Fun at Home
During a recession, you don’t want to spend money on unnecessary items or activities, especially when you can have fun at home at a very low cost! For example, instead of going out to eat or ordering takeout, pick out a couple of new recipes to try each week and invite your close friends over for a potluck dinner. Rather than hitting the gym, you can exercise at home.
Also, spend your money wisely when it's time to make intentional purchases. To get the most out of your money, it helps to read product reviews and to check ratings. This ensures you buy products that have staying power and will be worth the expense. One example of this conscious spending is shopping for your pets. You can read up on expert reviews and advice on pet products by clicking here.
You can also find fun ways to entertain yourself without spending a dime - for example, MoneyTalksNews recommends lacing up your sneakers and going hiking, checking out free museums in your area, looking for free shows and other cultural events, and simply hanging out with your friends at home.
No one wants to live through a recession, but it is a normal part of the economic cycle. With the right personal finance strategy, you can maintain your economic security throughout a recession. By implementing these tips, you’ll be able to organize your budget with convenient spreadsheets, protect your property with a home warranty, get a side hustle up and running, sharpen your skills by taking online courses, and even lower your mortgage payments.
To contact the Association for Financial Professionals, visit us online, and someone will get back to you as soon as possible.