The following is an article “How to Safeguard Your Money During An Economic Recession” by Marc Primo.
“You should start investing your money if you want it to grow.”
Most people have heard this piece of advice before, be it from family or friends. In theory, 📷it’s not bad advice. In fact, it is actually very practical for people looking far into the future.
Growing up, we were never really taught how to invest properly, right? Yeah, we saved up, but it was only because we wanted to buy something we wanted. In simple terms, once we had enough, we spent it immediately.
However, with all that is happening in the environment and more importantly, our economy, it is best to be prepared. Let’s face it, we have little to no idea when that proverbial rainy day will come.
That said, here are some ways you can protect your money in the event that an economic recession happens:
Go for Equity Savings. Taking risks might be in your vocabulary and you might have always been a risk-taker. However, you might want to take a moment and think before investing your money in unstable territory. Equity savings funds are the best way to go.
Don’t invest in property if you can’t pay for it. This is pretty much self-explanatory. Buying property (that you deserve) may be at the top of your priority list, but purchasing one comes with a lot of responsibilities. There are other bills to pay for. It will not be a one-time payout. Nowadays, house prices have stagnated, or in other words, they are continuously increasing in price. Acquiring properties, in general, is not a bad thing. Nonetheless, you need to look at the big picture and weigh the pros and cons before proceeding.
Invest in an emergency fund. As mentioned earlier, it is better to be prepared in times of emergency. You must have a foolproof plan B fund that would cover at least six months’ worth of expenses to keep afloat during recession.
Limit your spending. A penny saved is a penny saved—no more and no less. Stop and look at the overview of your expenses to figure out how you can manage your finances and earn more. Learning how to budget is essential and its primary tenet is to cut your spending on unnecessary things.
Take medical coverage. On the other hand, cutting expenses does not mean to take your health and the health of your loved ones for granted. Remember, health is and should always be your number one priority. Unfortunately, accidents happen. It is better to be safe than sorry and have a fund specifically allotted for medical expenses (e.g., hospital bills, maintenance, etc) at all times.
Manage debt early. What would you do if you were laid off unexpectedly? Where would you start? How would you be able to provide for your everyday expenses? This is where adjustment comes in. Segregate your wants from your needs. As much as possible, avoid eating out too often or ordering in when there’s plenty of food in the fridge. Avoid taking multiple coffee breaks and downgrade your mobile plan while you’re at it. These little things matter once you add up all the money you can save just by re-adjusting your lifestyle according to your means.
Stick to one job. As long as your current company compensates you properly and provides you with your basic needs—stay. Job-hunting is never an easy thing to do. Be grateful that you have a job because it means you are stable and have earning power.
Everything boils down to being ready. Train yourself to do these things to avoid being in debt or just simply making ends meet. As you already know, life is a whole lot better if you can live it without worrying too much.