7 Ways to Effectively Manage Your Finances During An Economic Recession
The COVID-19 pandemic has brought almost every country in the world into an economic recession. Some countries, like Sri Lanka, the United States, and even China are suffering the worst economic period in modern times. This put us to the question of how can we still effectively manage our finances during such chaotic times.
Based on my personal experience here are 10 Ways To Effectively Manage Your Finances During an Economic Recession.
1. Focus on Needs and Less on Wants
Remember that not everything that we think we needed is actually needed, it might turn out to be just want and can be removed from things you need to buy or allocate a budget for. Do you really need that new shoes, a new car, or even a new clothing line? Would it be better to buy a less expensive but better quality alternative to things that you are buying?
2. Learn to Budget
Budgeting is always hard especially when you have not done it yet. Some people have this philosophy that money is earned to be spent and there is nothing wrong with that but in a time of crisis, you better think wisely. Try to learn how to budget. Think of the things that are most needed and prioritize them. Eliminate things that are just excess.
3. Put Savings First
Now that you find the need and the courage to budget, always set aside the amount of money or percentage of your income that you want to go into savings. Many people think that savings should always be the amount extra or left at the end, so most people were not able to really save. That is why if you really want to save, secure that amount first and then budget the rest.
4. Calculate and Plan Before You Borrow
You can still borrow money and take out a loan but be sure to only borrow what you can repay. Take for example how moneymutual.com approaches borrowing. In a time of crisis, you will definitely need some help in finances but at the same time, it should not drive you further into misery.
5. Use Energy Efficient Appliances and Equipment
Electricity is one of the most expensive bills to pay so it would save you a lot of money if you would ensure that you are using energy-efficient appliances and equipment at home. Adding a few bucks to pay for a higher efficiency saves you a lot more money in the long term rather than setting down for the lower-priced competitor.
6. Be Power Conscious
Save on energy at home. As I mentioned before electricity is one of the most expensive bills to pay, especially for someone like me living in the Philippines so time to practice due diligence. Turn off equipment when they are not in use and yes that includes taking them off from the power plug. Search for ways to improve your power consumption at home and more ways to save energy online because I am sure there are tons. MERALCO's website for example has its own calculator which you can use for this purpose.
7. Share this!
You are not born in this world just for yourself. As others affect you so thus your action affects others. If people in your surroundings, community and your family will also effectively manage their finances then it will also mean good for you. Share this "7 Ways to Effectively Manage Your Finances During An Economic Recession," and also ask for additional inputs. Remember, that their experience can be different and might help you as well.
Remember to Prepare Always
According to Fortune.com, "the biggest drivers of inflation over the past several months have been rising prices for food and gas, both of which have been hit by a global supply disruption since the Russian invasion of Ukraine at the end of February," that is why a recession seems to be certain in 2023.
Remember that whatever happens, being prepared with your finances is the best way to survive a recession.
Do you have more ways to add to this article? Then please comment below.
Thanks for reading!
ABOUT THE AUTHOR
David 'Master Pogi' D'Angelo
Social Media Specialist | Blogger |
Environmental Advocate | Events Organizer
