We are super excited to share these amazing tips to keep you grounded during hard times. Kudos to you for looking out for yourself. Here’s how to stay afloat during a recession.
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- Cut unnecessary expenses such as subscriptions and streaming services (e.g. Disney Plus, Netflix, Hulu, etc.)
- Avoid eating out – includes takeout
Use coupons to your advantage for discounts on your groceries and other necessary household items. By momentarily cutting off subscriptions and streaming services, you give yourself more breathing room. Avoid eating out as it tends to cost more money than cooking at home. Some restaurants or delivery services might offer free delivery at the moment but they are in the same situation during a recession. Take care of yourself first.
Build Your Emergency Fund
- Put money in a high-yielding savings or money market account to earn you interest.
- Stack some of your earnings in a personal savings account as liquid money.
By putting money into a high-yielding savings or money market account, your money gets to work for you. Compound interest will begin to accumulate and earn you money every month whether or not you keep depositing earnings. Tip: The more you deposit, the more your return is.
It is important that you keep stacking your money for your necessities. Move money into your personal savings account to keep as liquid money, or money you can pull out within a matter of seconds in case of an emergency. It usually takes 3 business days for earnings to come in from a money market account so it would be wise to keep some cash at hand in a personal savings account.
Live Below Your Means
- Hold off on any moving plans, stay put
- Avoid liabilities such as a new car / new home
- Rethink your current standard of living
If you were planning on upgrading your standard of living this year you might want to hold off on those plans. Stay put, chances are your rent or mortgage is currently lower than where you want to go.
Avoid liabilities altogether. This means the new vehicle, the new home, the new tuition, etc. It is important to stay out of debt during a recession. Liabilities require you to take money out of your pocket and prohibit you from saving and investing it.
Rethink your current standard of living. If you’re able to momentarily downsize then you’re in a great situation, do it to reduce your costs on rent and utilities. Another great tip is to work together with people you trust and split the cost of rent in order to live adequately to cut back expenses and continue to save money.
Use Gift Cards During A Recession
Gift cards are an amazing way to treat yourself for free. Most people tend to use gift cards when the economy is booming and everything is great. If you’re like us, you probably have a few saved. Perhaps you just never got around to using them or have a little sense of self control most don’t.
Gift cards are great during a recession because it allows you to make a purchase without taking money out from your wallet. You’ll never get to appreciate them the same again.
Recycle / Cash In Change
Recycling is a great way to keep you afloat during a recession. You’re essentially getting cash back on all your recyclables. Plus, it’s great for our environment; let’s not forget that. Although recycling money may not be a lot, it is certainly a good way to earn $10-$20 every month.
Cashing in loose change is also a great way of gathering money that’s been collecting dust. If you’ve already been filling up the piggy bank now is a great time cash it in.
Work Temp For An Essential Company
Essential companies seem to be the only places hiring during our current coronavirus pandemic situation. Although we are currently facing this issue, it is unlikely we will be coming across this challenge for every recession.
Take precautions, but see what is hiring and how it may convenience you. Go where the money is and keep stacking your money.
Develop An Extra Source Of Income
Developing an extra source of income is one of the best ways to keep you afloat during a recession. There are many ways people are earning money online by working from home. Find your side hustle! Read: “Ways You Can Earn Money During The Coronavirus Lockdown” to see how you can begin making money on the side and from home.
An extra source of income will help pay for your necessities or allow you to put extra cash away into your money market account or personal savings account.
Millennial’s can also earn money by:
- Delivering food
- Providing ride-sharing services
- Opening an eCommerce store
- Writing as a freelancer using Fiverr
- Tutoring online
We composed more ways on the excerpt below with more details to help you on your journey to earning extra cash!
Read: 7 Easy Ways Millennials Can Start Earning More Money
Sell / Pawn Unused Items
Sell items that you don’t use anymore to keep you afloat during a recession. This strategy is a quick way to put cash in your pocket.
Consider selling (old, extra, or unused):
- MP3s / iPods
- Cellphones / Smartphones
- Blu-ray, DVDs, Headphones, Televisions
- Gaming consoles / Games / Movies
- Books / Board Games / Magazines
You can sell on Facebook market, eBay, Amazon, Craigslist, etc.
It would be wise to make transportation arrangements in order to cut back on fuel expenses and avoid unforeseen car repairs. If you work locally perhaps it would be best to bike to work. Maybe your work is a few blocks away, walking is another alternative. If your work is cities away carpool with someone one week and alternate driving.
Use A 0% APR Credit Card
We don’t usually condone the use of a credit card but there are times where they become handy, especially when used responsibly. We suggest using a credit card with 0% interest in the event that there are no savings in your account. The 0% APR will help you pay off the credit card without any additional interest per the providers agreement. Do your research to see which cards fit your needs during a recession.
Here are other benefits to using a 0% APR credit card:
- Payoff other credit card debt
- Apply payments to principle on loans eliminating accruing interest
- Most 0% APR credit cards have terms up to a year
Qualifying for one of these bad boys requires you to have great credit score so make sure you keep track of yours.
Read: Best Ways To Use A Credit Card Responsibly
Withdraw From Your 401K
This strategy is last on our list as it is only suggested as a last resort. The government has currently signed off a stimulus package that allows you to withdraw from your 401k without any fees. Although this is only temporary, it is certainly an option in order to keep you afloat during a recession. We recommend keeping a portion of these earnings in a money market account to earn you interest while it’s out of your 401k.
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Also Read: How To Better Prepare Yourself For The Next Recession
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