By Courtney Rosenfeld
Nobody wants to see a recession happen, but it’s always a possibility when the economy is unstable. Research shows that recessions are linked to higher unemployment rates, less consumer spending, and an increase in financial stress. Even if a recession is inevitable, though, these experiences aren’t. You can develop your resilience and come up with strategies to weather the storm. Check out the following six tips from Black Hills Financial Planning that will help you thrive, even if you’re in the middle of a recession.
Managing Money More Effectively
- Create a budget — and stick to it. In the age of apps, there’s no excuse for not having a budget. There’s an application for every possible budgeting style. Try one of these tools to create a budget — and more importantly, stick to it.
- Start a side hustle. If an impending recession makes you question the security of your employment, it might be time to diversity your income streams. Starting a side hustle can offer some insulation against the potential threat of unemployment under a recession.
- Diversify your investments. Your income isn’t the only asset that you can diversify. If you hold any investments, now is the time to start diversifying these assets, too. Rather than just investing in stocks, consider bonds and other investment options that may be more stable.
- Pay off expensive debt. If your debt makes you feel like you’re drowning, you need to start paying it off faster. High-interest debt such as credit cards and installment loans will eat up all of your income if you don’t pay it off as quickly as possible.
- Spend money wisely. When you do need to splurge on a big expenditure, it’s essential that you spend your money wisely. Look at reviews and be intentional when you’re shopping. Even when you’re shopping for seemingly small products like pet supplies, being mindful can help ensure that you get the best quality items available.
- Keep your stress levels low. Even when you’re dealing with financial hardship, it’s important not to succumb to stress. Don’t focus on the negative. Instead, continue building strategies to overcome your struggles and establish financial stability.
Get a Home Warranty
Unexpected home repairs are one of the biggest sources of financial hardship. To avoid this, you should invest in a home warranty. This contract can be renewed annually, and it can provide reimbursement for issues with your HVAC system, plumbing, electrical, or appliances. A typical homeowners’ insurance policy will just cover injuries, structural damage, and theft. This leaves you vulnerable to major expenses if repairs suddenly become necessary. Finding the best home warranty company is less complicated when you do your research beforehand.
Keep Your Head High, Even in a Recession
There are plenty of reasons to be stressed out, but money shouldn’t be one of them. Even if you find yourself with less funds than you would prefer, you can take steps to protect your finances and prevent costly mistakes that could worsen your situation. One of these steps is investing in a home warranty. Additionally, you should pay off credit cards and other debt with high interest rates, and you should diversify your income and investments, too. These strategies can set you up for success — and help you truly thrive — regardless of what state the economy may be in.