Those of us old enough will know that recessions are cyclical and that through the course of our lifetimes will likely have to endure several of them. Guest blogger, Andy Masaki gives some sterling advice for ensuring we never have to endure such tough lean times again. As an American Andy’s viewpoint is obviously based on his experiences in the USA but his advice is just as valid for the rest of us wherever we’re based in the World. Enjoy.
Arm Yourself for the Next Big Recession.
This is supposed to be a stage for recovery but the housing bust, the alarmingly high debt level in Europe and the tapped-out consumers are about to produce a far uglier scenario. As the economy was recovering from the aftermath of the previous recession, the fiscal cliff is soon approaching and this storm is perhaps going to remind us again of the Great Depression. Very few people in the nation are well-armed to combat the consequences of the approaching recession. In order to emerge successful as an individual amidst the economic crisis, you have to follow certain financial tips. If your money starts controlling you, you will soon start losing control over your finances and incur debts that can be repaid through debt consolidation and debt management. Don’t let this happen, follow the tips below to stay afloat in this economic state.
- Start saving more money: Yes, this tip might sound obvious but most of the Americans aren’t doing it. Most economists believe that people should save at least 6-10% of their monthly income, irrespective of the amount that they make in a month. Despite all such advice, the savings rate is paltry 3.5% as an increasingly large number of consumers are still trying to control the mighty urge to purchase things. If you want to be equipped for the recession in 2013, you should make sure that you save more than 10% of the income that you make in a month.
- Always create a Plan B: We’re usually habituated with creating Plan A for executing things but very few of us actually create a backup plan called Plan B that can support us in case the prior one falls short of our expectations. Personally, you might be out of the woods, but if the economy turns south again, the employers could trim their employees, cut their take-home pay and also reduce the hours again. Therefore, you should be equipped with contingency plans if you want to stay afloat. (Contact Deborah if you want to find out more about her Plan B).
- Curb using credit and stay liquid: Even though you have a rainy day fund, this won’t be of any good if you can’t use it or if you tend to lose money by selling off your stocks or other investments. Even though there are personal loans with affordable interest rates, you should always keep maintaining a cash cushion by keeping aside money. Restrict the usage of credit cards at the same time as this will help you keep debts at bay.
- Start something to boost your income: As long as your employer approves of the venture, it shouldn’t hurt to do another consulting work on the other side so as to help boost your monthly income. There are various online money making opportunities that you can take resort to in order to enhance your passive income level. Making money affiliate marketing and content writing are two of the most common options to try out. (Contact Deborah for more ideas or look at http://www.deborah-meredith.com to see how she now boosts her income in various areas)
As the US lawmakers attempt to take steps to reduce the swollen US budget deficit, the Americans can’t assume that the government will be of any help. Since it’s time to be more self-sufficient, you could choose to follow the above mentioned financial steps through which you can keep debts at bay.