Recessions are inevitable, kind of like the waves that crash onto the seashore. There’s simply no telling how big the next one will be, and if you’re not ready for it, a rogue wave could pull you out to sea.
While there’s little that can be done to prevent an economic recession (besides voting), there are steps that you and your family could be taking to be better prepared for the next one.
In fact, I believe a recession is already knocking at America’s doorstep. Keep reading to find out how to prepare your family for an economic recession.
Readjust Your Budget
Now is the best time to sit down with your spouse and reevaluate where your family is at with your budget.
I’m willing to bet that there are areas of spending that you could be tightening up with, especially when it comes to entertainment and eating out.
Or maybe you have a spending problem when it comes to buying clothes? These are all areas that you need to set a monthly budget for so that you’ll have more money put away at the end of each month.
Pay Down Your Debt
Getting rid of your debt before a recession hits is probably the best way to protect your finances.
That’s because when a recession hits, people tend to lose their jobs or get their hours cut back at work. If you’re already struggling to make ends meet, then being in debt will only put you further behind.
Try to pay off as much debt as possible before an economic recession hits. This is a really good tip to help you prepare for an economic recession.
Besides cutting back on entertainment and drive-thru visits, I’m sure there are a few other expenses you could tighten the reins on also. Prepare for an economic recession by reducing expenses.
Are you willing to part ways with that cable company and go with a much cheaper tv streaming service instead? Or what about all the subscriptions that you’ve signed up for?
I’m betting that there are a few that you don’t read or even use anymore. Yeah, they may only be a few bucks here and there, but they add up quickly.
You may also be paying far too much on your cell phone and internet bills.
Most of these companies will do whatever it takes to keep your business, so don’t be afraid to negotiate with them on lower payments.
These are just a few examples of how you could be saving.
Save for Your Emergency Fund
Many of us have credit cards that we use “only in case of emergencies.”
But wouldn’t it be nice if we didn’t need to rely on them because we already had the money saved up?
This may sound too good to be true or unattainable for some of you, but it’s not!
By setting aside $25 to $50 each week, you’ll build an emergency fund in a matter of months that will cover most of any future unexpected finances you may have like car troubles and medical bills.
And if you or your spouse were to lose their job during that recession, that emergency fund could hold your family over until you found another job.
A good rule of thumb is to start saving up towards three to six months’ worth of all of your expenses.
Stock Up on Food and Water
One of the best things that you could be doing to prepare your family for a recession is to stock up on food and water.
Even if a recession doesn’t ever wipe out your grocery store shelves, it’s crucial to have an emergency supply of food and water in case you’re faced with severe weather caused by a natural disaster.
I’m not saying that you need to go out and buy a year’s worth of food, but having enough non-perishables on hand to last a few weeks would be beneficial for both situations.
You should also have a good supply of drinking water.
The recommended amount is one gallon per person, per day. But if you have small children or are pregnant, you’ll need more than that.
It’s always better to have too much than not enough when it comes to water.
It can be much harder to sleep at night when you’re noticing your hard-earned investments taking a gradual dip in the wrong direction.
As tempting as it might be to pull your money out and accept your losses, don’t! The stock market is like riding an unpredictable and emotional roller coaster.
The investors that get hurt the worst are the ones that jump off too quickly, just before the upswing.
By hanging in there during the tough times, you’ll reap huge benefits as the stock market conditions improve.
Learn New Skills
When the stock market crashed back in 1929, tens of millions of Americans lost their jobs, money, and their comfortable livelihood in a short period of time.
To see to it that their families were fed and that there was a roof over their heads, people looked for work in any way they could.
And that typically required doing something that they weren’t normally accustomed to doing.
That’s why it’s great for you and me to have hobbies and side hustles in case our full-time jobs were to close up shop in a moderate recession.
Also, take the time now to learn new and valuable skills that would benefit you during that time as well.
Find New Ways to Make Extra Cash
For those of you that don’t have a side hustle to help you set extra cash aside, now may be the time to get one.
Don’t work at a part-time job that you absolutely hate, but rather find a gig that doesn’t feel like work and something that you’ll enjoy.
There are all kinds of temporary work, contractor positions, and freelancing jobs that are quick and easy ways to make extra money. You just have to take the time to look.
More Tips to Check Out
- Lessons from the Great Depression
- Frugal Tips for Surviving a Layoff
- 25 Practical Tips to Living Frugally
These are several simple ways to prepare for an economic recession. What are some other steps that people can take to stay ahead? I’d love to hear from you!