There’s been a lot of talk about a possible recession coming and let’s be real – that word scares a lot of people.
My readership is primarily in their twenties and early thirties, which means many of us have never been through a recession, but we remember that time being a scary one for our parents. People lost jobs which means they weren’t making money and we all know what that does.
Recessions happen and will continue happening for as long as we live. So it’s better to face it and be prepared when it does, instead of hoping and praying it’ll never happen again.
Here’s a list of 7 ways to (seriously) prepare for the next recession. It will happen and it will be okay. Take these steps below to financially gear up for whatever the future brings.
Take action now: Before we begin, take action now, and download the FREE Ultimate Financial Planner. Paying off debt and managing your finances can be FUN. Included is a bonus debt thermometer.
1. Save more money
For many of us, it’s so easy to save more money (even when we think it’s impossible to do).
If you were hit with a big emergency bill for you or your pet, you’d immediately think of ways to start saving more money. Maybe you’d hit fast food joints less, cancel your expensive gym membership, or take a long hiatus from shopping for clothes.
Here are some of my favorite ways to save money:
- Get cash back on groceries (even healthy foods) with Ibotta. Get $10 for signing up for Ibotta here. If you’re downloading Ibotta on your phone, the app will ask if you have a referral code. Use my referral code: lwyxxrb and you’ll get $10 for signing up.
- Move your money into a high-yield bank savings account. Your bank right now probably offers 0.03%. That’s nothing. Radius Bank currently offers 1.20APY. You can move your money and emergency fund to a high-yield savings account to save even more money. You can get started with Radius Bank here.
- Save money on meal planning and save time grocery shopping with $5 Meal Plan. You get your first 2 weeks free here.
- Lower your bills like your cell phone, internet, cable, insurance, and more with Billshark. I used it myself and saved $290. All you do is upload a bill that you want to save money on here.
- Learn how to manage your money with the Master Your Money Ultimate Bundle (filled with guides and printables to make you a personal finance pro).
- Get cash back on online purchases (pretty much anywhere) with Ebates. You get $10 for signing up for Ebates here.
- Find out what your credit score is here (for free and it does not hurt your credit score to check it) and start working on increasing your credit score to save money.
- Get the best coupon codes instantly when shopping online with Honey.
- Use a budget planner to keep track of your spending (this is the budget planner I use).
2. Make more money
One of the easiest ways to fight through a recession is by making more money. There’s always a limit to how much money we can save, so let’s focus on making more money.
Back when I was growing this blog in the beginning, I worked several side hustles at once. I was a Rover dog walker, Care.com babysitter, a freelance writer for several websites, virtual assistant, and I worked for various agencies as a caregiver for children and adults with disabilities.
Here are some side hustles I recommended checking out:
- Teaching English online with VIPKID
- Working as a bookkeeper at home
- Freelance writing
- Selling on Etsy
- Becoming a work from home proofreader
- Selling on Amazon
- Working as a Facebook Ads Manager
- Renting out a room or house on Airbnb
- Listing your freelance services on Fiverr
- Earn money with surveys like Swagbucks and Springboard America.
3. Increase emergency fund
Keep your mind at ease during unpredictable times by increasing your emergency fund.
Only 40% of Americans could pay for an unexpected $1,000 expense. This means 60% of Americans will most likely have to credit card any emergency that happens. Not good.
If you have no emergency fund saved up at all – it’s okay. Don’t beat yourself up. Instead, take action today and start saving.
You’ll often hear that you should save 3-6 months of non-discretionary expenses. This is basic living expenses such as rent/mortgage, groceries, gas, and utility bills. Many people opt to start a $1,000 and build up an emergency fund of $5,000-$10,000.
This might sound crazy to you right now, but you can totally do it! It just takes small baby steps to slowly move toward a large emergency fund. You can even make things a bit more fund by using this emergency fund box so you have a visual reminder of your goals every day.
Another great option is using Digit, a way to save money without thinking about it. You create goals to save for certain things (emergency fund, student loans, credit card debt) and Digit knows when to save for you. I’ve used it before when I had trouble saving money on my own and it was a great way to get started paying off debt.
You can even use this savings plan below to meet your $1,000 emergency fund goal. Then work on saving $1000 again and again!
4. Aggressively pay off debt
The total U.S. consumer debt is sitting at $13.51 trillion. The average household carries $8,282 in credit card debt.
Kids at 18 are taking out financial aid and graduating with an average of $30,000 in loans. Some easily take out twice or triple that amount if attending a private university.
It’s not news by now that millions of Americans are facing debilating debt, but there is a way out.
Instead of paying the minimum each month on your loans and credit card, come up with a plan to pay off your debt ASAP.
Aggressively paying off your debt means spending the absolute minimum and eliminating spending on things like clothes, restaurant outings, and vacations. Oh, and definitely eliminating coffees (sorry).
Doing all of these things can make a huge dent in your debt, and then you can focus more on investing and retirement.
Networking is a big deal and is often overlooked by many people, yet it can do big things.
For example, I would’ve never landed in Forbes (article here) unless I had gone to Fincon last year and did some networking. That article has already lead to new relationships and partnerships which is great for my business.
By using the power of networking, you get to meet people in different fields and develop connections.
These genuine connections can lead to new business opportunities and jobs that you otherwise wouldn’t have known about.
If you’re unsure on how to start networking, join Facebook groups for whichever business field you’re in, attend conferences (there are hundreds if not thousands of them), and take advantage of sites like Meetup that have a ton of groups you can meet in person for pretty much anything.
I know networking may sound terrifying to you (especially if you’re an introvert). If you have the same personality type as me, I recommend reading here on how to run a business with an introvert personality. This is really helpful because you can use your introverted qualities as strengths instead of thinking of them as weaknesses.
6. Improve and expand your skillset
So many of us get comfortable in our jobs which leads us to not work on expanding our skillset.
It’s almost 2020 and it’s easier than ever to learn new things online with YouTube or Skillshare. At the touch of a button, you can learn new skills like creating a website, graphic design, coding, cooking, and even learn a new language.
You can beef up your resume just by adding a few more skills which makes you stand out among others.
When I was in college, I volunteered at several different organizations, which not only helped my resume but also lead me to learn new things in leadership.
7. Get creative
We’ve talked about a lot in today’s post, but let’s think outside the box.
If and when a recession happens, there are ways to overcome this. Some of these ideas may sound crazy to you – but they’re worth mentioning!
When I couldn’t find a job and was in a rut, I decided to do something crazy. I saved up a few hundred bucks and went on a summer long volunteer trip. I was given accomodations, food, and lived in a really cheap city in South America.
And when the volunteer trip was over, I came back to the states and still couldn’t find a job in the small town I lived in. So I did something crazy again – which was became an au pair abroad. Everything was paid for. This option isn’t available to everyone (mostly women, under 30).
You can also check out WorkAway, which has tens of thousands of volunteer opportunities available. Most programs are up to a year long, come with free housing and food, in exchange for a few hours of work per day.
And that’s it!
I know this isn’t an exciting topic to talk about – but it’s totally necessary. In fact, we should be talking more openly about this as it’s a natural occurance in the U.S. economy system.
Recessions happen and it will be okay.
Make sure you follow the 7 steps above and prepare for anything ahead of time. You can do this!
What are you doing to prepare for the next recession?
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