The recession is here and will stay with us for a while. No one really knows how long this financial crisis will last but one thing is certain, it will be the worst financial crisis of our lifetime. People have lost jobs, homes and life savings. Banking system is under lot’s of pressure so are consumers and companies. All news is bad news these days.
Still for some it is time for learning the most valuable life skill. The skill to manage finances in bad times is what every one needs.vSo we thought we should do our part in helping you get started with some tips.
Here are 9 tipsvthat will help you urvive a long and deep recession.
Don’t panic or sell all your investments. Keep a cool head and don’t let your emotions take over. Think about long-term profits and stay calm.
Pay off all your debt
Pay off all your debt as soon as you can, as this can be your biggest enemy during recession. This includes your payday loan, car loan and all your credit card bills. Use the highest-interest first or the snowball method, but become debt free.
Keep a track of your spending
Keep a record of where all your money goes. There are many ways to track your spending and make a budget. Online solutions, such as Mint.com and Wesabe.com, and others like Quicken and Microsoft Money are also available. Just make a budget and stick to it.
Eliminate Extra Spending
Once you’ve made a record of your spending, Remove all the extra expenditure from your budget. Things that you don’t use very much, or you can survive without, should be eliminated from your budget.
Think before you buy. Make a list of your grocery and you’ll be surprised by how much you save just by thinking ahead a little.
Buy Used Stuff
It is better to buy a high quality used item rather than a cheaply made new one as the higher quality lasts longer. Look for used cars, clothes, furniture and anything else that you want to buy. A late model used car is a better value than a new car. If you are going to buy a new item, buy a high quality product and do some research on it before you buy.
Tidy Up Your Finances
Make sure that your credit score is good and your finances are in order as the next year might be a good time to refinance. You are entitled to one free report per year from each of the credit bureaus; so if you need to check your report, contact your credit bureau.
Understand Your Investments
Before you invest in anything, make sure you find out all the details and understand the risks completely. Also, if you are working with some financial advisor, ensure that he is not a fraud.
Keep Cash In Hand
It is always good to have some cash in hand. You should have at least 3-6 months of living expenses in a savings account for emergency use. You can also save money by paying cash, as during recession, cash is your friend.