How To Survive The Next Recession
The cyclical nature of an economy makes it a certainty you will see a few recession in your life time, and with our last one almost ten years behind us now it is safe to start preparing for the next one. With Presidents Trumps announced tariffs putting the U.S economy back on the rocks, it is time again to start preparing for the reality. There are a bunch of steps people can take to minimize the impact of a perspective recession or even worse a depression.
The number one step to take to ensure a recession doesn't destroy your world is to cut out as much debt as possible. Debt is never a good thing, but in a recession when money is tight all around paying off debt becomings exponentially harder. As it becomes harder to pay the debt down the interest rate will continue to compound increasing your debt more and more. Clearing debt is just a good general rule for personal finance, but during a recession it is a necessity.
Step number two would involve an deep look at your budget to determine what could be trimmed out in times of need. When the economy is strong it is understandable to enjoy life a little, yet when a recession hits some may need to switch up their lifestyle a little bit. Cutting out none essentials can leave you with a larger nest egg for emergencies down the road,
Speaking of the nest egg, now would be a good time to build up a solid emergency fund. Jobs become scarce during a recession and you never know which sectors will feel it enough. Having a savings for this exact situation can make it less stressful and help keep the family feed until the next opportunity arises.
The last major step is one we should all be doing to ensure a successful and comfortable life in general but is essential during hard times. Increase your human capital.
Learning a new skill is almost always good for perspective employers. The more skills you learn the more options you leave open down the road should things change. The landscape of 2018 is changing rapidly. The old 1960's tradition of working at company for 30 years and retiring is almost dead. You need to be ready for the next, best opportunity reguardless of the field it is. Specializing in one area is good, but a contingency plan is always useful. Im sure horse and buggy drivers back in the day never thought they had to worry.
Recessions can be detrimental to individuals and families, but they don't have to be. If you are willing to take the personal responsibility for your present situation and your future you can thrive during a recession when most others are struggling. But it all starts with you. At the end of the day you are the number one factor. Only you can shave your debt. Only you can create your savings. And only you can increase your own personal worth.