Due to this pandemic issue and increasing contagion most of the countries today are imposing stay at home restrictions which have caused businesses closing and going bankrupt, regular employees are laid off and daily food consumption price increasing and in return official recession has arise. The question now is, how long will the recession last? Here are five tips to help make sure your finances recession-proof, as recommended by experts.
1. Boost emergency savings
Job loss is a difficult situation you will be in as much as possible save for the rainy days and boost your emergency funds. Put the money into a savings account before you pay anything else. Rather than trying to save the money that remains at the end of the month, before it gets eaten up by other expenses or you’re tempted to spend it.
2. Identify ways to cut back
Are you spending more money than you want? Figuring out how to cut spending isn’t as easy as it sounds, as you may not realize where you’re overspending and it may be hard to break long-held habits. It’s a good idea to check monthly expenses and identify items and remove them from your monthly budget, be it subscription or services or dining out, etc.
3. Live within your means
You will often hear the saying, “People need to live within their means.” But what does that mean? It typically means that you should spend less than you make, avoid debt, and not overextend yourself.
Experts typically recommend spending no more than 30 percent of your net income. Consider limiting or removing your unnecessary expenses like dining out, cable, vacation.
4. Develop new skills and work on it
The key to living your fullest potential is developing your skills. Learning skill should be the first skill you develop because it greatly helps you develop other skills. An essential ingredient to have good learning skill is motivation. If you are motivated to learn about a subject, it will be much easier for you to learn it. You can only live your fullest potential if you always develop your skills so that you can give better and better value over time.
5. Pay High-cost debt
Prioritize eliminating high-interest rate debt no matter what specifically credit card debt as it returns high-cost interest rates. The more you’re able to put aside for saving and the less debt you have, it’s going to be available to you in case of an emergency.