Summer’s not the time to be worrying about things like the economy. Yet nearly 7 in 10 Americans are fretting about a recession by the end of the year (Bankrate poll). Just in time for Christmas!
There are two categories you could land in once the near-certain downturn begins. First, you could be one of the 41%who feels they are financially unprepared to handle an economic slowdown. Or, according to the same Bankrate poll, you could be one of the 74% saying they were “actively taking steps to prepare for an economic downturn.”
In which category are you?
Preparing for a recession means taking a hard look at your finances. However, reviewing spending is guaranteed to trigger an anxiety attack for some! And unfortunately, fear is the very emotion that prevents people from taking steps to eliminate collection calls and delinquency notices.
Having an objective rather than an emotional mindset can help. For example, would you be feeling the same fear if your dear relative was in a financial mess and you were the only one able to tackle the problem? Use this objectivemindset to disconnect yourself from your money while tackling these first four steps to financial survival in a recession.
Begin by asking and answering these questions:
First, go online and find your statements. Many banks automatically categorize your bills, but if not, you will group fixed and discretionary expenses separately on paper or use Excel.
First, focus on fixed expenses. These bills occur regularly and must be paid, like rent, mortgage, utilities, childcare, etc. Add them up. Exclude optional costs like streaming services and memberships, which are discretionary expenses. Pay particular attention to grocery and clothing spending, which can easily cross over into discretionary if you are spending more on wants than actual needs.
Next, itemize all discretionary expenses. Notice trends over the past three months. Restaurant checks, vacations, streaming services, and coffee drinks are all discretionary items to reduce or eliminate. On your spreadsheet, redline those to cut or reduce to balance your monthly budget. Now that you know where your money is going, are you overspending, or do you have a healthy balance to put toward debt reduction or an emergency fund?
If not, reduce spending. Did you know that re-shopping for car insurance, cable, cell, and internet services can shave hundreds off your monthly bills? One budgeter realized over $100 savings per month by calling his cable company and complaining about slow service! He was offered a faster, better service for less. Changing habits can save money, too. For example, reduce utility bills and help the environment by reducing power and water usage.
Typically a recession means layoffs. However, the U.S. currently has over 11 million open jobs and a shrinking labor force, one factor that has some economists predicting a “soft landing” rather than a hard economic crash. So if you or your partner are facing job insecurity or looking for work, don’t hesitate to begin your search today. You’ll need the extra income to hedge against inflation and meet your family’s basic needs during a downturn.
Your best bet? Get a head start on reigniting your career by contacting Partnership Employment today. We’ll find the perfect fit for your skillsets with offerings in industries like legal, HR, IT, finance, and accounting.
Have you been out of the workforce for some time? Then, lessen your financial worries by finding a job you like. We can even help you with a temporary placement so you can try it before you “buy”!
If you have solid expertise and years of experience and need job security, we represent top employers looking for talent like you. So recession-proof your financial situation by letting Partnership Employment evaluate your career potential today!
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