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According to a Bloomberg survey of top economists, the chance of a recession in the U.S. is more than 47%. Because of the high rate of inflation and rising interest rates, the likelihood of economic shrinkage in the next year grows. Consumers may be nervous about the future of their finances with the possibility of a recession in the near future. Here are some ways you can prepare and come out of a recession even stronger.
Improve Your Financial Situation
If you’re worried about a recession, you can help improve your finances by adopting good habits. Look for ways you can free up more of your income by cutting back on unnecessary expenses, like streaming services, takeout, entertainment or travel. Additionally, aim for a more frugal lifestyle and strategic purchasing.
Make Smart Investments
You also have to be strategic with your investing options during a recession. Consider investing in real estate, stock funds or dividend stocks during uncertain times. You can also shop around for savings accounts that take advantage of the higher interest rates.
Consider a Home Warranty
It may also be smart to invest in a home warranty. This helps homeowners save on repairs. Homeowners insurance only deals with theft, structural damage or injuries on your property. For your home’s systems and appliances, a home warranty offers coverage. You’ll pay each year for your policy which covers problems with your HVAC, plumbing, electrical and more. Shop around and read reviews to find something in your price range.
Start a Recession-Proof Business
During economic instability, there are some businesses that still manage to thrive. If you want to open your own business during a recession, consider offering childcare, online freelance services or repair services. A recession-proof business idea could help you significantly increase your income.
Switch to a New Job
Another option is to switch careers during a recession to make more money. Before applying to new positions, write a stand-out resume that gets noticed. Use a free resume builder to choose a template and customize it with photos, colors, images and your details. This may help you land a high-paying position in your field.
Pick Up a Side Hustle
It may also work for your schedule to pick up a side job for extra income. If you have spare time, earn money so you can put yourself into a better financial situation. Lots of side hustle options give you the flexibility to work from home, such as graphic designing, freelance writing, drop-shipping or tutoring.
Pay Off Debt
Saving money each month is ideal during a recession. Try your best to pay off high-interest debt so you get more financial flexibility. Additionally, consider some creative tax filings, such as filing separately from your spouse to save on taxes.
Postpone Big Purchases
If possible, hold off on big purchases during a tough economic downturn. Avoid buying a new home, car or big electronics unless you desperately need to. Financing may be tricky during this time because of the higher costs and interest rates.
Stay Focused and Stress-Free
Finally, if you’re worried and anxious about the uncertainty during a recession, devote some time to self-care. Engage in stress-relieving activities like meditation, yoga and stretching to help ground yourself.
A recession doesn’t have to be a disastrous time for your finances. Look for opportunities to improve your financial future by starting a recession-proof business, changing careers, or reducing your debt.
Amos Faulkner wants to help people “do money well.” Money is a constant in our lives. Yet, as a bank teller, Amos realized that many people don’t pay enough attention to how much they have or how much they need, now and in the future. Well, now, the buck stops with his site, domoneywell.com. From teaching your children how to manage their money to saving for your golden years, Amos will cover it all.