6 Tips on Living a recession proof life in a failing economy

By Sharon Arrey, MBA Finance and Accounting


Photo by Stuart Miles

It is no surprise the US economy is in a serious downward tumble but have you ever considered how to recession proof your family and yourself? Cost of living is at a constant rise, there are little or no positive changes in salary. The question becomes, how do you modify your spending behavior to balance today’s failing economy? Home prices are steadily falling, unemployment is increasing at the fastest rate ever, the heartache and pain of watching your assets slide in value is mind bugling.

Let’s go down memory lane for a second, shall we? Some may ask what a recession is. Simply put, a recession is a time in any economy of a temporary economic decline just like what the world is experiencing today. During times of recession, it is common to see a contraction in a business cycle or what may otherwise be termed a slowdown in overall economic activities.

What then is a recession proof lifestyle, you may wonder? This is when consumers like you and I develop self-sufficient skills which help an average consumer adjust their budgets to match current economic challenges. Let’s look at some basic tips to help trigger these inborn survival (recession proof) instincts we all are born with.

Start by making up your mind. Live within your financial limits. Do not go buying a new pair of shoes when you already have 20 pairs in your closet just because you “have some extra change”. You only have 2 feet and can only wear 1 pair of shoes at a time and no one really notices if your shoes are old or new. People are more focused these days on making ends meet than paying that much attention to what you are wearing on your feet. Fashion is recycled anyways and even if you wear shoes from 5 years ago, your friends will still go “wow those shoes are different and classy! Where did you get them?” Trust me no matter how many times you wear those old shoes; you still get compliments like they were brand new. Don’t take on a $2,000 mortgage when you can still live in the same kind of home for less than $1,000 a month. It’s a buyer’s market. Be smart and don’t always try keeping up with the “Jones”.

Make cash purchases rather than credit card purchases. The reason being, if you have $500 in your wallet and go out shopping, once you spend all $500, you will be forced to go back home. But with a credit card, nothing really stops you from continuous swiping. Reconsider the purchases you make and how you are making them; this economic down turn is not slowing down anytime soon.

Driving less will help you save on the cost of car ownership. I can tell you first hand I have now become the public transport queen and it helps me save at least $50 on gas every week. Ride to the closest train station, park and take public transport if you can to your destination. There are a variety of transportation options, pack-n ride, van or carpool, riding the bus or train, etc. Take advantage of these.  Many wealthy people are doing it every day and I am yet to hear of anyone dying from it. If they who can afford bigger and better things are cutting down, so can you. This is not a time to be prideful; it is a time to be wise and use common-sense. Whenever you have to drive, plan your driving route; make sure to things you need to do in a specific area, do those first then drive to the next area.

Save on groceries by using coupons. You know it amazing how people save by clipping coupons. Go to www.lastbudget.com and watch a prime example. I hope you will be inspired by this video.

Guard your health by eating healthy, working out daily and getting the proper amount of sleep. Staying healthy is one of the most important things you can ever do to remain recession proof. You know how expensive healthcare costs are. Make staying healthy a top priority.

Last but not the least, always have an emergency fund. Deposit  the money you would have spent on that new pair of shoes you may not have worn until next year into a savings account only to be used for emergencies. Emergency funds come in handy in case of an unforeseen job loss, medical issues or death.

Again, do not take lightly the signs of the times. Be wise and reasonable when it comes to spending and personal finances.

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