How to Survive a Recession
Recession. The word pops up everywhere these days. This expert says we’re in one. This expert says we’re not. Still another says it isn’t here yet but it’s likely to be just around the next financial corner. What is a recession, anyway?
A recession is driven by a country’s gross domestic product (GDP) or the dollar value per person a country can place on the grand total of all goods and services the country produces or manufactures. When GDP drops for two or more fiscal quarters, the country is said to be in negative real economic growth, or in recession.
With this definition in mind, how to survive a recession means keeping your own worth from dropping during the time the country’s worth is dropping. When a recession is prolonged or hits particularly hard, merely maintaining personal wealth can be as important as gaining.
How to survive a recession, then, depends upon individual ways to maintain or increase individual gross value by paying attention to the things that are variable, or controllable, within one’s own life. Salaries and income cannot always be manipulated to offset a recession so most people must look to other lifestyle changes to offset the nation’s sinking economy.
Once a recession begins, there is no real way to determine when it will end. Learning how to survive a recession means making sure every penny counts and stays around for as long as possible. In this light, it’s important to spend only what is necessary and save as much as possible, in case the recession eventually means loss of income or rampant inflation.
Smarter shopping strategies are beneficial when considering how to survive a recession. Clip coupons, buy only when something is on sale. Save luxury purchases for later, after the economy bounces back. Certain items historically go on sale on schedule, such as white sales on linens and bedding during January and August. Learn the sale cycles in your areas and shop accordingly but limit spending only to necessities.
During a recession, interest rates usually drop. There aren’t many silver linings in the cloud of recession but this is one of them. Use this time to pay off as much debt as possible, when the interest rates are lower, and you will have paid back fewer actual dollars than if you wait till the economy is healthy again and interest rates go back up.
Sometimes how to survive a recession means making the most of what you have. Or what you know. Got a closet full of clothes that seem to be getting a little dated but you know new clothes during a recession is a frivolous purchase? Replace buttons, alter hemlines, borrow belts or scarves from other garments to update the clothes you already own. Have a neighbor with a showcase vegetable garden but a car that never seems to work? Trade some auto mechanic time for a basket of vegetables. Learn to barter goods and services and leave the actual cash out of the picture entirely.
Another effective means of how to survive a recession relies on stockpiling goods and products you use on a regular basis. This is especially handy in the grocery store. When a commonly used item is marked down to an exceptionally good sale price, buy the limit. You may not eat it all in the next day or two but you’ll be happy to have it later, when money may be even harder to come by. Fresh produce and meats can be stockpiled, too, as long as you freeze or preserve any excess so it won’t spoil between the time of purchase to the time of consumption.
Learning how to survive a recession can be an empowering experience. Learn to be more reliable upon your own wits, skills, and abilities. Step outside your comfort zone and learn to cut your own hair, mow your own lawn, and change the oil in your car.
During a recession, you cannot depend on income flexibility on your job to see you through. How to survive a recession means learning instead how to rely on yourself to squeeze every last penny out of what you already have and what you already know.