I keep reading and hearing that a recession is coming. This feels frightening but in fact they happen every 4 to 5 years and so don’t panic. I guess due to the war in Ukraine, and the last few difficult years this one feels worse.
I am someone who likes to be proactive and not wait for things to happen to me. I was thinking about how I could plan to recession proof myself as much as possible and realised that through my frugal habits I was already.
1. I had started stocking up on goods to avoid rising prices. Just buying an odd can or bag of flour helps. I have focused on oil, butter, cheese and staples. These were things that I knew were increasing in price, or I knew I would need. I always have plenty in my freezers any way.
2. I had saved an emergency fund. If you lose your job or the car breaks having an emergency fund gets you through those hard times without getting into much debt. It is hard saving an emergency fund when it feels like you are living pay cheque to pay cheque, but you can build it up by selling things, having a side hustle, getting a second job and just squirreling away odd loose change. I saved a lot of my money from doing this over time.
3. Get rid of debts and don’t make any more. If a big chunk of your wage is going out each month on paying off your credit card or debts it is hard to save. It is such a good feeling when those debts are gone. If you have debts try paying off your smallest debt, or at least leave your credit card at home and get rid of your online shopping habits so that you don’t rack up anymore. Interest rates are rising.
4. Try not to rely on one income and increase your income if you can. I have just got a side hustle but in the past, I have sold crafts, done car boot sales, gardened for the elderly. If it is something that you can enjoy like dog walking, babysitting or selling crafts, it doesn’t feel as hard.
5. Cut down your budget. I check mine at the end of every month to see where I can make cuts. Going through bank statements, stopping direct debits and seeing where your money is going helps. We have just stopped Netflix as we hardly watch it during the summer.
6. Improve your knowledge. I am always looking to learn new skills that will either save me money or make me money. Preserving, foraging, cooking from scratch, growing my own food are all skills I have taught myself.
7. Find your tribe. Build up a support network to share skills, share ideas and information on saving money. If you live locally, you could share equipment, bulk buy, share babysitting, swop plants etc.
Which other ways can we all cushion ourselves and get ready for this recession? I would love to hear your ideas. The more we are prepared the less impact it will have on us.