How to Survive a Recession

by on September 5, 2010

With the economy recently showing less signs of stability than before, individuals are going through financial setbacks, which usually start with common late payments, then move to a somehow bad credit and ultimately, sink in heavy debts. In order to avoid the entire damaging effects of any kind of financial recession, individuals, especially conventional bread winners, need to prepare a strategy to apply, provided one found him/herself in such a situation. Here are some guidelines to follow, in case of a recession.

  • Confrontation: It is important that one should understand his/her current situation and prepare him/herself for the coming changes. The reassessment of the financial position of the family is extremely significant in that case, as it would give them a chance to make a detailed budget of the expenditure and the savings, and more importantly, on the expenses that need to be covered and that which need to be eliminated.
  • Resolution: At this point, after having all the required information on the family’s financial position, one should focus on putting forth a plan that would basically lessen the intensity of the recession. The plan has to include the amount of money, which the family, needs to pay off debts, to save backup for emergencies and to cover necessary funds as the medical or educational ones, if existed. In addition, the plan has to include a source through which one can cover the debt interests, lest faced with ones.
  • Action: This step involves positive moves in reducing the expenditure and in cutting down the budget. The first and foremost way to achieve these goals is to spend nothing on new stuff and to never yield to any online promotion. Some other minor stuff that would help in cutting the budget is to cut through some conveniences, as the transportation, the food and the housing. If the family members are using more than one car, they should start coordinating to find a common ground that would end up with them using one car or even local transportation, if not a bicycle. Renting one of the house rooms would also help in supplying the family with a source of money that would contribute in these hard times. In case the family members are in the habit of having one or two meals out per week, they should start cooking.
  • Prevention: It is smart to stay out of trouble. The members of the family who earn and contribute in the family’s income should make sure they are not losing any of their salaries or their incentives for any reason, whereas, those who do not earn are better not cost the family any money, as fines.

It is always recommended that a family would maintain their solidarity during such times and to respect the situation and what it bestows of inconveniences. However, enjoying the smallest things about life is the only way through which the family would survive any recession.

(photo credit: Getty Images)

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