Recession Coming? Here’s What to do...

Unless you have been in a long long vacation where you can’t get any news…you’ve heard that a recession is coming. Every news is covering how our rebound and good standing have been too long in standing, and now, it is due to a correction.

You may think… why is there a due correction? What is that about? Well, that is because it has been historically proven that we have 9-11 years between each recession. Also, as you all know everything that goes up must come down (like a sale) in order to move forward. And when it comes to the market… it needs to come down to “correct” (not be so expensive) itself because its been really high for a long period of time.

So what is a recession? A recession is when two or more consecutive or continuous quarters are in the negatives. This means that business sales and revenues decreases, businesses stop growing and hence people may lose their jobs, prices may go down (or at times stay the same), and people’s income stay the same or decrease.

Of course, this is a concern for many since as we all know that many of us spend more than what we make and don’t have a lot of savings in our banks. This may mean that many of us may be hit hard during these coming times and hence we want you to prepare for it.

Here are things that you can do to stay ahead of the curve beyond saying your “pennies” as many are recommending:

1) Lower your expenses - its always a good time to lower your expenses. But this time is particularly important. Since income may be at risk, you want to make sure that you are at your bare minimum in case you lose your job or have an emergency that your job’s income may not be able to cover it. Let go of the frills or the wants and stick only to the need. Then stash the extra cash into your bank account.

2) In case you don’t have any savings, please start being aggressive with this. Make sure that you are saving at least 10% of your monthly income (not yearly - monthly). Place an automatic transfer of the amount to your savings and don’t look at it or touch it.

3) Get a side gig - start looking for additional review streams so that you are not only dependent of one. Note though that there are some that pay faster than others. So do you research carefully before committing to one, and they should be low cost.

3) Create an Intentional Plan/Budget and stick to it. This is no time to go with the wind. The wind will sail you to troubled waters.

4) Pay as much as you can your debt. The less debt you have, the better you will be when the recession hits. By the way, if you cant pay off the debt, make sure to pay off your minimum payment until you are able to pay more.

5) Kill complacency - If you can, start looking for new higher paying job so that when the recession hits, you are already in a better position. Just note to make sure you jump to a reputable company that will not be affected by the recession as much. DO YOUR RESEARCH CAREFULLY! Why? Because this ensures that you do not lose your job (usually the last ones hired, are the first ones fired in lay offs - of course there are exceptions to the rule), and you want to make sure that you are not only increasing your salary but also keeping your job.

6) If you stay in your job, start managing up and letting your management or any stake holders know your value - what you are contributing to the company’s bottom/your department. The more people know how valuable you are, the better. Also, build stronger relationships within the organization. Let’s face it, people keep the people they like even if they are not producing. Yes, it is sad, but oh so true. This is not the time to skimp on those group lunches or outings.

7) Network Your Ass Off - I know, I know, I know… network may not be your fortay or you may feel a little bit weird about reaching out to people now. First do it eloquently. Do it with them in mind and bringing them value. Don’t just reach out to reach out. This is a waste or your and the other person’s time. Now that we’ve established how… here is the reason - because if you lose your job you can reach out to them and they can help you with an opportunity. Usually people wait until they have lost their job to start the networking. This is too late and a big mistake. There will be so many people out there doing the same that will be hard to get something if you did not nourish the relationships previously.

8) Use LInkedIn like your life depends on it. Start posting articles, research, or any other pertinent information for your contacts. This is a sure fire way to keep involved and connected within your industry. But a word of caution - don’t depend too much on it that you forget the most important connection - the face to face. Make sure that you are also having face to face conversations/meetings with people.

9) Check your investments and make sure that they are rebalanced to showcase the coming times. Or, and I know many will scoff at this, lower your payment towards your investments (lowering is the operative word), move that money into savings and never touch it. Why am I saying this? Because cash as always is king, and especially during a recession and you will need it more than future stock earnings (especially 401K which you won’t get until 65+ years old).

If you know of any other tips that have helped you in past recessions, or you have any questions, email me up at financialdivasgroup@gmail.com. I can’t wait to hear from you!!

XOX,

Clara