Do not spend your money needlessly. Needless spending seems to be a way of life for many Americans. We are a nation of consumers that put comfort and entertainment before fiscal responsibility. Although difficult to accept, it is the way of life for many Americans.
Rather than continue spending on items that bring comfort and entertainment, cut out some of the items that drain your account and only purchase items that are necessary to live. IE. groceries, household, rent, mortgage, utilities.
Look for opportunities to create extra income. Any time there is a chance to make extra money, there needs to be action. This economic downturn is making it abundantly clear that multiple sources of income are now a necessity. The key component here is time. It is the greatest commodity, and most of us find that we have less and less of it as life goes on.
If we can spend 5-10 hours a week on learning a skill and marketing that skill, then we can start understanding where the opportunities are and how to monetize them.
Read and watch to learn. An economics book, or a book on how the stock market works will help you understand the current climate and how to navigate future events. If you’re 40 years old you have roughly 5 more recessions coming before you retire. It might be a good idea to prepare yourself for the next one.
If you’re going to watch videos on YouTube Just make sure the source is credible. The amount of self-proclaimed guru’s out there is astounding. Most are giving advice towards the masses, but miss the finer details. IE: Everyone should contribute to their 401(k)!
Oh really? wheres the mention of tax brackets, current income, projected future income, Roth 401(k) contributions, social security taxation in retirement, cash flow, etc…
I rest my case.
Look into refinancing your debt and managing your monthly nut. The lower your monthly obligations are, the better prepared you are to withstand an economic slowdown. While considering your monthly outflow, please make sure contributions to retirement plans remains the same. (This allows for dollar-cost averaging)
We recommend reducing your overall monthly expenses in general, so in a recession type of environment, that advice is even more important.
When considering how to reduce your monthly expenses, consider the current interest rate environment. Interest rates are at historic lows and the Fed’s actions have provided banks with liquidity to keep loans flowing to businesses and consumers. Take advantage of these rates, and refinance debt like auto loans and credit cards.
Realign yourself with the things that matter most to you. In this particular economic environment, there is a lot of time for personal reflection. Meditation, prayer, and introspection should be apart of your life and your planning. Take the time to understand what motivates you as a person, and align your values to your finances.