Given the craziness with COVID-19 and its impact on our financial situation as a whole, you’re probably wondering whether we’re in a full-blown recession. Though experts can’t really agree on what will happen in the upcoming months, it’s safe to say that living like you’re living through a recession will help.
Whether you’re temporarily or permanently laid off or lost a much-needed source of income (like part of your business), you may not want to hear suggestions for turning a bad situation into an opportunity. In fact, the idea of turning challenges around for your own benefit is in line with the annoying soundbites that productivity gurus sell.
However, adjusting and reacting to your situation is the best way to survive the current economic climate. Here are some tips for surviving a recession.
In This Article:
1. Reassess your finances
Living in a recession means that many people’s income situation has changed. If that’s the case for you, this is an excellent time to see what your spending habits are like and whether your budget is working for you. Maybe you’re struggling to keep up with rent payments and find yourself relying on your credit cards for everyday purchases, increasing your consumer debt load. Or perhaps you’re fine after cutting back on expenses but aren’t sure whether to keep investing at the same rate.
In any case, re-evaluating your goals, income, expenses and even your savings and retirement goals are crucial when you’re trying to understand how to live through a recession.
2. Take a careful look at your skills
It’s easy to believe your current skills aren’t needed or appreciated, especially if you’re finding it hard to get a new job after being out of work. In contrast, this is a good opportunity to think creatively about different ways to apply your skills or hone your other talents.
For instance, did you have a minor in a different area than your major in college? If so, chances are you have marketable skills you haven’t taken advantage of. Perhaps you minored in computer science–programming skills tend to be highly sought after. Use what you’ve got to improve your chances of getting hired.
3. Turn your hobby into your own business
This is a great time to use your skills from working on your hobby for years into a side-hustle or side business. If you don’t have a job (or are working fewer hours), it’s a great time to see if what you do can be profitable.
If you’re not sure where to start, there are plenty of websites that act as a marketplace of sorts to advertise your skills. For instance, Upwork is a website where many business owners or hiring managers look for contractors with specific skills (like photography or writing)–many people have earned good money finding work there.
Other places include TaskRabbit where you can create a profile and offer help such as assembling furniture, gardening and more. Don’t forget Fiverr, where you create a listing for your particular skill (seriously, so many people sell unique services there!). With all these websites, the more high-quality work you do, the more your ratings will go up. Hopefully, it will increase your chances of being hired.
Related: Clever Gardening Secrets
4. Go back to school
There are so many options to earn another degree or to learn a new skill. Places like Udemy make it super simple to do so. Since most of us aren’t leaving home these days, many places offer classes online from the comfort of your own home. The skills you learn can help you become more marketable in the eyes of your current or future employer.
However, don’t just focus on the return on investment (ROI) for the funds you put into additional education. Learning a new skill or studying an interesting topic has an intrinsic value that can’t necessarily be measured by finances only.
5. Consider frugality
Being more frugal doesn’t really need to take a lot of time. Sure, you can do things like extreme couponing or driving around multiple stores to get the best deal, but you don’t have to. In fact, you can use online couponing sites or browser extensions to do much of the work for you. Plus, there are other ways, such as being more mindful of what you purchase.
Frugality means different things to different people, living through a recession provides an opportunity to explore and decide on where you can intelligently save money.
6. Eliminate your credit card debt
Credit card interest is expensive–especially if you don’t have enough income to cover the minimum payments. If this is the case, look through your expenses first to see what you can cut back. You might be surprised to find out that you can stop using credit cards–a debit card is a great alternative if you can’t spend physical cash at the local grocery store.
While you’re at it, check to see what the fees are for your current bank–there is no need to pay any fees, seriously. Financial institutions such as Axos Bank, Chime, Empower and Radius Bank don’t require monthly maintenance fees or balance minimums. Plus, there’s the opportunity to earn a higher interest rate compared to traditional bank accounts.
To get rid of your credit card debt, first try to call your credit card companies to see if they can assist you by lowering, eliminating or deferring your payments. If not, perhaps they will lower your interest rate. It never hurts to ask.
Otherwise, consider strategies such as the debt avalanche or debt snowball to get out of debt as soon as you can.
8. Sell your extra stuff
The great thing about the internet is there are so many places to sell your items online. Places like eBay, Facebook Marketplace, Poshmark and Mercari have enormous reach and can help you sell your items much quicker. There’s a market for practically anything, really–your clothes, your furniture, your electronics, your art, your classic video games, and your baseball card collection gathering dust in the attic.
