Is A Recession Bad For Everyone?
Is A Recession Bad For Everyone?
Most of us have lived through and experienced a recession before. It is predicted by most economists that we will be going through a recession in 2023.
We will see further increases in the price of goods, potential stock markets declining, new graduates having a hard time securing jobs, and people losing their jobs. So, is recession bad for everyone?
Yes, I would say everyone would feel some of the negative impact of a recession directly or indirectly through difficulties experienced by the people they know including their loved ones.
In general, people tend to spend less when a recession is anticipated and therefore certain industries like retail and entertainment get impacted faster and more because people tend to cut these expenses from their budget first.
So, you may be wondering how long does a recession last. Let’s answer that question next.
When Will This Recession Be Over?
Historically, the majority of recessions have lasted about 10-11 months however the negative economic impact may last and be felt for a few years longer. Let’s hope this recession will not follow the same pattern and will be over much faster.
Next, let’s discuss 5 ways to prepare for a recession.
How To Prepare For A Recession In 2023
So many of us get caught in the downturn of the economy due to many adversarial situations like the pandemic and recession. While we cannot predict the timing of these adversarial situations we can make it a priority to plan for them and take care of our financial health and stability.
Here are five ways you can start preparing for a potential pending recession with your family.
Stop Getting Caught Up In The Hype
Stop watching and believing all the hype and negativity in the news and social media. Do not give your power away and let all the negative news affect you emotionally and cause you to react rather than respond.
What you consume will become a part of your identity, beliefs, predominant thoughts, feelings, behavior, habits, and eventually your destiny.
Assess calmly what really will be the possible financial effects of a recession or a job loss on your family and household. Talk to your family members and discuss your situation so that everyone can be heard, contribute, and be fully informed of the potential impact and your plan to deal with it.
Have Enough Runway
Learn from past adversarial situations like the pandemic and set aside a peace of mind account covering a liquid cash balance that you would need to sustain yourself in case of a job loss. I would recommend that you set aside an amount of money that is equivalent to at least 12-18 months of all your required household expenses.
In case you do not feel like you have a sufficient amount of time to save that amount quickly enough then get an unsecured line of credit which is easier to qualify for and get while you are employed. You can use this line of credit as your emergency funds until you can save enough money that can act as a runway for you to survive.
Have Multiple Streams Of Income
Review and track all your incoming money and the different income streams that you have. Make sure you are not putting yourself at risk and relying on only one income stream like a job.
Having one stream of income is not secure and is similar to an analogy of having a one-legged stool (a job you rely on solely to pay for all your monthly expenses) and when that leg breaks or is no longer there you end up on the floor.
Some of the things you can do to make more money are to invest your money in dividend-paying stocks, and cash-flowing real estate, start a part-time side business, and add a different offer to your business like coaching/consulting.
Be Resourceful
Be resourceful and figure out how much support you have available to you in case of financial troubles like family, friends you can borrow money from, or partners that you can collaborate with on a potential new product launch to make extra cash.
Reduce Expenses
Track everything you spend money on every day for at least 3 months on different categories like food, entertainment, rent/mortgage, transportation, etc to get a better understanding of your outflow of money.
Try to cut down and reduce any unnecessary amounts that you are spending every month like subscriptions, and gym memberships that are not beneficial and you are no longer using, and also start buying things in bulk to save.
Put all the newly found savings towards your peace of mind account. Do not cut things that are investments for your future like marketing your business, and money invested in your self-growth.
When you show the universe that you are good at managing what you have earned then you will be trusted with and given a lot more money and abundance. The more you can be trusted with, the more you can invest and multiply it, and the more you can endlessly give to others.
So, it is your responsibility to use your talents to make all the money that you can make, manage and multiply it well so that the universe knows it can give you more. It can trust you with a lot more and you become a trustee receiver for your creator to distribute the money wherever it needs to go.
In conclusion, you now know that a recession is bad for everyone because they would feel the negative impact of a recession directly or through difficulties experienced by the people, they know including their loved ones.
In general, people tend to spend less when a recession is anticipated and therefore certain industries like retail and entertainment get impacted faster and more because people tend to cut these expenses from their budget first.
You also learned 5 ways to prepare for a recession and make your finances recession proof like not getting caught up in the negative hype, having enough runway, having multiple streams of income, being resourceful, and reducing expenses.
I Hope you feel empowered and informed enough to start planning and implementing the above tips in case of a recession and to make yourself recession proof and financially stable and healthy.
Next, read can I start a business with no experience for further helpful insights and tips.