I’ve been busy recession proofing. Many analysts say that a recession is coming, and many believe that we are already in one. So, what can you do to prepare? Here is how I’ve been preparing.
One of the best ways to ride out a downturn in the economy is to get rid of as much debt as you can. I have no debt besides my mortgage, so I’m in a good place. If you have any outstanding credit card debts, student loans, auto loans, or anything else, now is a good time to start working on paying them off.
Even if you can’t pay everything off, just having one less monthly payment per month can give you back a lot more money in your pocket. If you work in an industry prone to cutbacks, then having some extra cash in your budget is never a bad thing.
There are many ways to approach paying off debt. A good one to check out is the Avalanche Method. This strategy organizes your debts from highest interest rate to lowest and has you pay them off in succession.
Finding ways to boost your income can help weather an economic storm. This is especially helpful if you suffer a cutback at your full-time job or if your budget gets squeezed by inflation. I picked up a part time job a few months ago. Working a couple days a week yields me an extra $500 a month. You can choose to work more or less depending on your situation but having some extra income can help take some pressure off your budget.
Having a budget is always a good idea, but it can be especially helpful during a recession. Knowing where every dollar goes is critical when prices are rising on everything. Finding ways to make cuts and save money is much easier when you know where it is allocated to.
How can you start recession proofing? We are living in trying times right now. Inflation is impacting almost everything, the markets are in turmoil, and companies are starting to hint at layoffs. To weather the storm, you will have to get out in front of it. Some things are beyond your control, but you can approach the situation with a plan. Reducing debts, boosting income, and sticking to a written budget are all good places to start.
Writer and Investor. Based in the Pittsburgh, PA area, Brian holds full-time employment as a Warehouse Manager for an electronics firm. Brian enjoys wealth building, investing, gardening and the great outdoors. Brian holds a B.A. in Environmental Studies from the University of Pittsburgh and an MBA from Robert Morris University.