9 Strategies That Will Make Your Finances Recession Proof

A recent survey reveals that many corporate executives at well-known American companies do not see a recession taking place in 2019. However, this does not mean that you should not take strong measures to protect your finances. If you fail to take heed to this sound advice, your finances may take a big hit during the next economic downturn.

1. Create a Realistic Budget

There’s an old saying in the financial world, “You should live within your means.” Creating a realistic budget is the best way to manage your finances. In short, a financial budget will help you see where your money is going.

2. Create an Emergency Fund

When the economy begins to dip, your employment status and income can be in jeopardy. This is why it’s vital for you to create an emergency fund.

  • Your employer may cut your hours
  • You make poor financial decisions
  • Your business is unable to generate enough revenue to cover your living expenses

How much should you save? You should save at least three to six months of your wages. This will help you resist turning to credit.

Resorting to credit will make matters worse. You will need more capital to repay your creditors. At the end of the day, turning to credit will be one of the worst financial decisions that you will make in your life.

3. Focus on Prudent Spending

You should make an earnest effort to concentrate on spending your money wisely while the economy is in good shape. It is okay to treat yourself to nice things, but you should keep things in perspective. For instance, shopping sprees can put big dent in your finances. It is a huge mistake for anyone to live beyond their means.

4. Network with Influential Professionals

Are you in the workforce? As we stated earlier, there’s a possibility that you will lose your job when the economy tanks. This is why you should network with influential professionals in your area.

5. Update Your Resume

Please keep in mind that no job is immune to a recession. You should be ready to find new work if the economy takes a turn for the worst.

6. Payoff High Interest Credit Cards

We enjoy having credit cards at our disposal. They are convenient, but misusing them will put you in a financial hole. Unfortunately, thousands of consumers run into financially difficulty when they max out their credit cards. Can you imagine how they feel when a recession takes place?

7. Diversify Your Investments

Once you have money in your possession, it’s time for you to put it to work. An experienced financial consultant will not hesitate to tell you that you should have a diversified investment portfolio. A diversified portfolio will stand the test of time during an economic recession. It will not take serious losses and it will recover within a reasonable amount of time.

8. Supplement Your Income

Supplementing your income is one of the best ways of staying in charge of your finances. Getting a second job or applying for freelance opportunities will increase your yearly income.

9. Real Estate Investing

Real estate investing is a sure-fire way of preparing you for an economic disaster. You can rehab homes and sell them for a healthy profit. You can earn a full-time income with this investing model.

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