The year 2020 has brought a momentous change to all of our lives. The coronavirus pandemic has caused a big shift in the fortunes of millions of people. The reason is because of the “r” word: Recession.
In this article, we’re going to tell you everything you need to know about recession, which is the economic condition that many experts say we’re about to enter into.
What Is A Recession?
Technically speaking a country is officially in a recession when its production goes from positive to negative. This is called negative growth of a country’s gross domestic product.
A recession is characterized by a number of economic indicators, including:
- Unemployment
- Housing bust
- Stock market decline
When Is The Next Recession?
Many economic experts believe that we are entering a recession. The reason they say that is because consumers stop spending.
Another sign is that businesses begin to slow down. They may also stop hiring and even lay off employees.
This creates anxiety in the workplace and other companies guard their budgets and people begin to cut back.
How To Prepare For A Recession
A recession is a terrible thing, but you can navigate it if you have a strategy. Here are three steps you can do to help mitigate the situation.
1. Cut Back On Spending
You don’t want to be spending a lot of money if you can help it. The #1 thing you need to do is stop spending money on things that are not necessities.
This would include things like:
- Subscriptions
- Gym memberships
- Going out to eat
- Shopping sprees
- Entertainment and recreation
2. Start Saving
This goes hand in hand with #1. When you cut back on spending, what you want to do with the money is start saving it. You’ll want to save on groceries and other things.
You could open a savings account if you can find a good APR. That way, you money can begin to accrue interest at a faster rate.
You’ll also need to put a savings strategy into practice. Here are some great tips.
3. Start Making Money
During a recession, full-time employment is something that only a relatively few people will be able to sustain. If you’re not deemed an “essential” worker, it may be tough to keep a job.
That’s why you’ll want to try to get some part-time work or a side gig to help pay the bills. Keep your eyes and ears open. There are plenty of opportunities to:
Final Words
Always remember that it’s not how you start, but where you end up. In other words, in a recession, it may get bad, but just know that it’s temporary. Things always bounce back. Always.
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