A recession is defined, by most economists, as two consecutive quarters of negative Gross Domestic Product (GDP) growth. The economy is currently well past two quarters of negative GDP. There are even signs the economy is in the early signs of pulling out of the current recession. The recession has made many people think about their financial situation and wonder if they could have been better prepared to deal with the economic downturn.
Make yourself an essential part of the team at work. Go the extra mile at work by having excellent attendance, offering to take on extra duties, keeping up with trends in your company’s industry, and always complete assignments on time or early. Keeping your resume up-to-date will help you stay focused on how you are contributing at your place of employment as well as prepare you for potential unemployment. Depedning on the industry you are in, your job may be more vulnerable during economic downturns, so be prepared if you are in a cyclical industry, like autos or hospitality.
Have your healthcare options ready. If you lose your job during an economic downturn, plan your healthcare during unemployment. You may be able to take advantage of your current employer’s healthcare for a limited time. If your healthcare is part of a spouse’s plan, see what options exist if your spouse losses his/her job. Also check with state and federal agencies to see what options might exist if your income becomes non-existent.
Create a budget and reduce/eliminate expenses. During the good times people will often increase monthly expenses by upping their cable TV subscription, shopping at expensive stores (when alternatives exist), buying more name brand products, etc. With a budget you can see where your money is going and where you can cut back if you need to reduce your expenses.
Avoid new debt and save. Once you have a budget in place, assuming you follow the previous advice, you can makes plans to avoid any new debt. Your budget should also include a small amount of money to be set aside for a rainy day fund. Without increasing your debt and adding to a rainy day fund, you can prepare you and your family for economic downturns, which are guaranteed to occur in the future.
Hopefully this advice can help guide you in the right direction. The current recession might already be hitting you too hard now. If you are still employed, you might still be at risk while the economy takes time to recover. Prepare now for the worst and hope for the best.