10 Ways to Prepare for a Recession

We heard it recently from Jeff Bezos himself, “avoid big spending like refrigerators, cars, and televisions”. And for small business owners, hold off buying equipment for new investments as an economic slowdown is imminent. He said, take as much risks off the table.” A recession is looming.

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A recession is an economic decline that is indicated by an increase in unemployment, inflation, a decline in sales for both wholesalers and retailers, and the shrinkage of GDP. For many ordinary people like us, we feel the pain and fear of an economic downturn. We have experienced it a few times before and the economy always recovers. And the only way to survive through the hard times is preparation.

  1. As the e-commerce magnate himself advised, avoid or delay big purchases. If you have that cash for huge purchases, maybe keep it for a little while. If you don’t have that money and plan to loan it, then delay that gratification or don’t purchase at all. I’ll go with the latter. Chances are you will be caught up with high-interest rates and some other unpleasant surprises a recession delivers.
  2. Delay a big holiday if possible. If you need a break, perhaps do it locally or think of alternative means to part company from your daily grind with reasonably minimal spending.
  3. Stick to your job even if it is a little less than amusing. While doing so, learn new skills, review and update your resume and when the opportunity decides to cross paths with you, you would be ripe enough to seize it.
  4. Prepare for a potential loss of a job. We can only hope we keep our job, but economic despair means companies need to let go of their people.
  5. Start a side hustle. Embark on something even if you’re not comfortable. It may take more of your time but it will help pay the bills or debt or sustain your needs.
  6. Tighten your belt. Cut costs. This is the time to start learning how to be frugal.
  7. If you have debt, pay it first especially if you still have the means to do so.
  8. If you have an emergency fund, well and good. Consider boosting it up. But if none, then start saving for it.
  9. Put off having a baby. I know this might not go down well with some but if money is an issue then it is something to think about. A recession brings about a lot of uncertainties and insecurities. Having a baby can inevitably magnify an already precarious financial situation.
  10. Hold on and don’t lose hope.

Recessions happen time and again. Some are long and some are short. Some take a hard landing and some take a soft landing. It’s part of an economic cycle. It’s not all doom and gloom all the time. If I may reiterate, the best way for us to weather the hard times ahead is through good preparation.

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