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What is a recession?
A recession is an economic condition essentially produced by lack of spending. They usually occur in a 8 to 10 year cycle. Below you will find tips and tricks about surviving and thriving in a recession.
During a recession unemployment rates will rise, consumer purchasing will fall, business will go bankrupt or close down, people may lose their homes and university students may have a hard time finding work in their area of study.
Each and every recession is different the 2008 recession hit the USA markets hard and a lot of people lost jobs and homes.
During the recession some employment situations may change immediately others may be a result of the recession ripple effect. In our household we saw job loss due to the ripple effect and we survived and so can you.
Recession ripple effect. Once one business closes the people who rely on that business for income decrease their spending else where and it effects those secondary businesses that may have to change their employment structure or increase prices. This change results in a ripple effect in the job market.
In the initial phase of a recession you will notice a large volume of homes hitting the real estate market for sale for numerous reasons. People may have bought during a high price market and want to get out before prices drop further. Some may want to make the real estate money while they can do to job loss and use the money to survive the recession.
Surviving The recession
Living below your means and diversifying your income is the key to surviving a recession. In a perfect world going into a recession all your debt would be paid off and you would just need to worry about the here and now.
But generally this is not the case as high debt volume, slow debt repayment and lack of consumer spending is what causes a recession.
As it happens I have birthed two babies during the recession (both during the recession announcement and initial recession phase) and survived family job loss so I have learned a thing or two over the years about recession survival. First off be grateful for what you have and take note of what happens during the recession as a lesson for the future.
It may sound like a crazy idea but work at paying off your debt. When people say recession I get this cartoon image in my head of people hoarding supplies and filling up the pantry which is a good thing in moderation. But paying off your consumer debt is a must. The less you owe the better you will land during the recession.
Living below your means, using what you have and living a more frugal lifestyle is a great recession choice. You may notice a rise in food costs during the recession so spend wisely. Start cooking home cooked meals. Invest in your family.
Plan ahead, where do you sit financially on the job market. Ask around determine what your employment situation is. Some jobs will ride the recession out without notice. Others may lose their jobs and need to be prepared for the lack of income. Living frugally will help with this change in income structure.
If you are looking to learn more about money, budgeting and paying down debt take a look at this book. It made a world of difference when we started our debt reduction journey.
Smart Money Saving Related Posts:
- 30 Super Frugal Money Saving Tips
- 21 Ways To Save Money On Groceries
- Learn What We Stopped Buying To Save Money
Decreasing your household expenses
Home is where you raise your family, it’s where your heart is. It’s also one of your biggest investments and one of your biggest expenses.
In a recession you need to learn how to cut these costs and learn how to make your money work for you (or go further). Living frugally and making smart choices with your money is the answer.
Lowering your food costs
The average family spends over $800 a month on groceries and a portion of it goes to waste. Learn some great money saving tricks with The Grocery Budget Workshop. Like how to cut your grocery budget in half and still eat well.
Did you know the grocery store plans for you to spend more money every time you shop? It isn’t a coincidence the floral department is at the front of the store and you have to go all the way to the back of the store for milk, bread or meat. Think about it you have to walk past all the things you don’t need (but want) to get the items you need.
The store plans for you to add extra items into your buggy as you shop. Skip the extra spending by shopping online.
Did you know you can have your groceries delivered right to your door?
All your favorite stuff:
- And So Much More
Why go shopping when you can have all your favorites delivered right to your door and usually for way less than the grocery store price.
If you have an Amazon Prime Account (if not, get a free 30-Day trial right here), plus you can save even more money by using their Subscribe & Save Program. I use this program to save extra money on diapers, formula and so much more.
Save even more money on all your Amazon and other online purchases with Rakuten. Try Rakuten and receive a $10 gift my treat.
Start cooking more meals at home
Surviving a recession is about being smart with your money. Skip the dining out and the drive thru dash. Or the ordering in, start cooking a home cooked meal. It doesn’t have to be difficult, simple 5 ingredient dishes.
You can save hundreds by cooking your meals at home. Need some inspiration? Try $5 Meal Plan for free for 14 days.
Home Cooking related posts:
Start shopping smarter
You work hard for your money especially in a recession so you need to shop smarter. Start stock piling essentials, things you use and need. This doesn’t mean go buy a gallon of ketchup unless you are really going to use it before it expires.
It means go stock up on rice and beans, dry goods. Things that will last and items you use. You can have all of these delivered right to your door if you have an Amazon Prime Account (if not, get a free 30-Day trial right here), plus you can save even more money by using their Subscribe & Save Program.
Learn how to preserve the bounty of the season and fill your pantry and freezer. Growing your own food is a great way to save money. Purchasing locally grown produce is a great way to help your local farmer and cut costs on food. Learn all the things you can freeze to help you save money.
Be content and grateful
As humans we always want more. The grass will always be greener on the other side. We are marketed to and convinced we need to keep up with the Joneses and bigger is always better.
In a recession a frugal home and a money smart home is wiser. You may notice those with the bigger home downsizing or all the “big boy” toys going up for sale.
In a frugal home the choice is on longevity not the here and now and not on how big something is or how flashy it appears.
Good ideas if you have questions
If you have questions about your mortgage, credit cards, investments or anything financial during the recession call your bank or your investment broker. Get the information first hand about surviving the recession financially. You can also ask your adviser about rate reductions and ways to save money.
Diversifying your income
During a recession there will be an increase in job loss or wage reduction because of this you need to diversify your income.
Diversifying your income means starting a side hustle, working from home, taking on a second job and learning how to make money online.
Ten Amazing Side Hustles You Could Start Today:
- Baker or Pastry Maker
- Etsy Craft Creator
- Social Media Manager
- Book Keeper
- DIY Designer or Painter
- Online Marketer
Don’t think this list is your only options. What are you good at? Can you turn it into a money maker? We have friends who raise animals while working full time. We have other friends who rent out a portion of their home with AirBnB and make a great side income.
Locally there is a big homemade crafting community that make great incomes on homemade quilts, baby clothes, crocheted items and so much more. One Mom I talked to says she supported her family and was able to stay home with her kids because of her crafting and quilting sales. I
think this is awesome. Being in charge of your own income, being able to provide for your family is amazing. What makes it better is when it’s doing something you love.
Surviving and thriving in the recession
No matter where the recession puts you. Whether you are four steps behind or eight steps in front know that the recession will change your outlook. It may change your financial situation but knowledge is power. Knowing what to do and how will help you succeed. Keep your head down, work smart, live frugally, save money, be grateful and pay it forward.
Updated March 17, 2020