Surviving a recession – what you need to do now
Photo by: warrenski
Next to the current democratic race, the biggest topic of discussion on the news, in the office, and on the internet is the recession. Are we in one? Well, that is all part of the discussion. Some people, like the media, would have you believe we’re already in one, while others like myself, think the indications are we’re heading in that direction, but certainly not there yet.
Regardless of whether you believe we’re in one yet or not, the real question most people are trying to figure out is, what do I need to know to survive a recession?
Make yourself an asset in your current job
In a down economy, one of the most visible impacts is people losing jobs and the rise of the unemployment rate. One of the key things you can do to avoid being on of the statistics is to stabilize your current job situation the best you can. Be on the lookout for opportunities where you can make yourself more valuable to your manager and your company. This can include things like taking on new responsibilities, learning new skills that are needed, taking on some of your managers responsibilities, being the first to volunteer for tasks, and doing everything you normally do but with a little extra effort.
Arrive a little earlier, and leave a little later. I personally don’t care when my employees work, as long as they are getting their job done. Nor do I care how many hours they work, but my views are very different than standard management. In corporate America, the umber of hours you work is often equal to perceived value and contribution. Coming in a little earlier and leaving a little later just may make a difference.
I’m not generally one to advocate single points of failure, but in a down economy where your job may be on the line, it’s critical that you find niches in your job environment where you are needed. Look for opportunities where you can learn something about the job or its infrastructure that only you and maybe a few other people may know. Do everything you can to know it stone cold.
I’d also suggest you constantly look at your peers and honestly ask yourself, “Am I in the top 10%?“. If you can’t answer with a resounding yes, than you need to figure out how to get there. Analyze your peers. What are they doing? How are they doing it? Talk to your manager and get some feedback on what you can do to perform better. Tell your manager you want to take it up a notch, and ask them how you can do that…and do it. I’m an IT manager, and if one of my employees asked me “What do I need to do to take it up a notch”, I die of shock right then and there.
Most importantly, make yourself look busy. I am amazed at the number of employee’s I walk by casually surfing the internet. Not just once a day, but multiple times during the day…and not surfing sites related to work. Don’t get me wrong, I’m all for the occasional mental break, but not 10 or more times a day. In a economy where jobs may become a little harder to keep and come by, you don’t want managers or co-workers even thinking twice about how busy you are. The potential risk, just isn’t worth it. So stay on task, keep focused, and if you need a break, take a walk instead. Not busy enough? Talk to your manager and tell them or better yet, find some work that needs to be done and do it.
Build a healthy emergency fund
I’ve written about the benefits and importance of having an emergency fund before. An emergency fund is a critical block in the foundation of financial success in good times, but even more so in bad or tough times. In times of recession where things cost more, people have less money, and may be struggling to make ends meet a healthy emergency fund can make a huge difference.
A healthy emergency fund can make that job loss less stressful by giving you some cash to pay the bills, keep the lights on, fend of the creditors, and frankly put food on the table. Too many people find themselves without a job and only a couple of weeks worth of saving. Not a good situation to be in.
Consider slowing down on your debt snowball, or backing off on the 401k investing a little and buffer up that emergency fund. Even better, cut your expenses and put the savings in your emergency fund. I realize I’m going against my own previous advice by recommending you slow down on the debt snowball, but I would far prefer that you take an extra year to payoff your debt than to be in a scenario where you can provide for your life basics due to a job loss.
Pay off your credit cards
Like building an emergency fund, paying off your credit card debt is good advice in or out of a recession. The great thing about paying off your credit cards now in preparation for a pending recession is that you won’t have to worry about being in a situation of not being able to pay them or struggling to pay them later. In a recession, you’ll have a hard enough time stretching your finances without the additional weight of debt pulling you down. Go ahead and pay it off now while you can so you don’t have to worry about it later.
Stop spending and frugal up
Prior to a pending recession or even during one is a really great time to change your spending habits. Begin learning to do without. Cut back on all of the extras that you’re used to, Starbucks every morning, lunch out everyday, and nights out of the town. Make your own coffee, pack your lunch, and cook at home. Implement a 24 hour rule on your spending and don’t buy things until you’ve had 24 hours to think it over. Before grocery shopping, make a list and only buy what’s on the list.
These are just a few of the many things you can do to “frugal up” your lifestyle and not only put some extra money in your pocket but get into the right mindset to survive any potential recession. After all, you don’t really need all of that stuff anyway.
Pursue alternative streams of income
Most advice for surviving recessions focuses on reducing expenses. While this is certainly a great idea, I also advocate looking for opportunities where you can increase your income. In addition to your main job, pursue alternative streams of income. Specifically, look for income opportunities that might excel during a recession. Maybe start a blog about the recession or how to keep your current job.
Look for opportunities in careers that are far less effected by the recession. People will continue to eat, need medical attention, require clothes, etc. Maybe start shopping yard sales and re-selling clothing on eBay.
Be creative and look for opportunities. Remember, a recession doesn’t mean people won’t spend money, it just means they will pay far more attention to detail when making a spending decision. Use this kind of information to your advantage.
Finally, don’t panic. First off, we’re technically not in a recession yet, regardless of what the media is saying. Second, a recession is a normal part of the financial cycle. What goes up must come down right? Remember, this isn’t the first recession, nor will it be the last. Who knows, you just may end up making your current financial situation far better as the result of preparing for a recession. Change isn’t always bad!
More tips on surviving a recession:
- Frugal tips to survive a recession
- 5 Strategies to Survive An Economic Slowdown
- Survive A Recession , Think Long Term
- 5 Ways I Plan To Survive The Recession
- Top Career Choices in a Recession: But is This How We Should Be Selecting Jobs?
- Preparing For and Surviving an Economic Downturn