How to Prepare for a Recession

Its no doubt we are in the middle of a recession or heading for one. In this blog post, I'll discuss ways to avoid sinking ships.

Build your Emergency funds (Accounts)
Side Hustles will bring in extra cash and diversify your income
Budgeting will help you evaluate your current financial situation and control costs
Staying Home might keep you from some unnecessary spending
DIYs will save your life.

Emergency Funds:

Believe it or not, it's not too late to build an emergency fund. While the economy is showing signs of a recession, unemployment is at its lowest- meaning you can get some income and save it.

It's hard talking about saving money when you're barely making ends meet. Therefore, it's essential to have a solid strategy to help you avoid future calamity.

I will advise saving a certain percent of your income for up to 6 months of your total current obligations. Pay attention to fixed expenses such as rent and utilities.

Side Hustles:

2020 marked the year of entrepreneurship. The emergence of Covid-19 left people working remotely or laid off.

According to Insuranks, "93% of working Americans have a side hustle." (Insuranks, 2022). Don't be left out.

The advantage of a side hustle is diversification and extra income. In case you get laid off, God forbid, or need to catch up on bills, a side hustle will give you some leverage to withstand economic downturns.

Budgeting:

My favorite personal finance word! If you've been budgeting all along, you'll find this to be a trusty mechanism to manage the adverse effects of the recession.

Budgeting will give you a clear understanding of your finances; if prices are going up, you can figure out where to tweak your spending.

The unique benefit of budgeting is that you can be fearless about what's happening in the market. You may not have all the money in the world, but budgeting keeps you aware of your strengths.

Staying Home Or Going Out:

If you are like me, leaving the house means spending money. I'll likely pass by my favorite pizzeria, and I'll likely buy something.

I know it's possible to spend money online too; e-commerce has changed consumer purchasing behavior.

Figure out what kinds of activities trigger an outflow. Whether it's HSN or going to the movies, learn to identify the triggers that could cost you money.

DIYs:

If you are not handy, please check out tutorials on Youtube that can help you save money. You'll find information on changing your tires, braiding your hair, or even making your body wash. How cool is that?

What I love about DIYs is that it helps you think of unique ways of doing things while you save money.

How are you preparing for the 2022 recession? Let me know in the comments. Remember to follow on Instagram @limnyuylainjo or @limeansbusiness for more great tips

Links:

Insuranks. (2022). 93% of Working Americans Have A Side Hustle in 2022. https://www.insuranks.com/side-hustles-2022

LiMeansBusiness