Recession is significant decline in economic activity spread across country, lasting for a few months Growth rate slows and rate of employment falls prices will be same and the economy hits its lowest point. Recession is very bad for labor as well as capital. The most common example of recession and depression is the global recession of 2008 financial crises and great depression of the 1930s.
Money Saving tips to survive in recession.
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1. Create Emergency fund- whenever recession starts our income and jobs will dip. You have to create an emergency fund for the sole purpose of helping you to get through the day to day financial needs. Emergency savings will support you and you can easily ride the wave of recession and emerge from it back on your feet. Start saving before a financial Downturn hits.
2. Pay your debts- during recession money is tight and debt payments will increase the unnecessary pressure on you. So make a plan to pay off your debts. Carrying lots of debts payments on your shoulders during recession can be risky make a budget and cut your extra expenses and the money saved by you utilize it for paying off the debts.
3. Additional income source- if you have a good full time job and earning enough you have to create a n extra income source for you to survive in recession. You can start consulting work or selling something online. Job security is nonexistent in recession so diversify your sources of income so that if you lose one stream of income you still have another one.
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4. Investment Goals- You have to get prepared for a recession involves taking a long term approach to the investment goals and diversify your holdings and always remain realistic about your risk tolerance. Don’t invest your all amount at one place. If you have a home and have savings means you already got a start in investment as you have some investment in real estate and some money in hand as cash.
5. Invest for the long run- markets get drop in recession if you don’t sell you would not lose anything as all of us know markets are cyclical and may be in the long run you will have plenty of opportunities to sell high.
