Six Tips to Help You Beat a Recession

With financial markets the world over slowing down as a result of the credit crunch, and people preparing to tighten their belts in light of the looming financial crisis, here are six easy ways to help keep yourself afloat during these economically turbulent times.

1. Don’t panic.
It’s easy to lose your head a little bit when the media seems to be talking about nothing but the terrible financial quagmire we’re in, but try and remember that a lot of it is media scaremongering. Bad news sells papers, and so statistics like rising food prices and employment rates and tumbling property values are exaggerated. As bad as things might seem, remember that most recessions last between 12 and 18 months, and then things get back to normal. This isn’t 1929, and it’s certainly not the end of the world.

2. Plan a budget.
Make sure you know your finances inside out. That means knowing how much you’re bringing in, how much you’re paying out, and how much you have left at the end of the month. Don’t spend more than you’re earning if at all possible. Avoid extravagant purchases, and save whatever you can in order to provide yourself with a buffer should you lose your job (3 months’ expenditure is the standard advice, 6 months’ worth if you’re freelance or self-employed).

3. Consider buying stocks.
It sounds counter-intuitive, but if you’ve got a little spare money lying around, consider investing in stocks. Share prices tend to drop during a recession only to pick up afterwards, so it’s possible to make a tidy profit if you’re willing to wait out the dip. However, while it sounds obvious, you need to remember that some companies won’t survive the recession, which means you could lose out if you back the wrong horse. Tread carefully, and never invest more than you can afford to lose.

4. Shop around for a better deal.
If you’ve put off switching your gas and electricity provider previously, now might be a great time to consider a switch. For a little bit of effort spent scouting around, there are definite savings to be made, and most people could end up with a substantial amount of cash in their pocket as a result.

5. Don’t change jobs.
In an economic slowdown, many companies are trying to save money. The easiest way of doing this is to lay off staff who are surplus to requirements. Additionally, many companies reward loyalty by getting rid of the newest staff members first, and so attempting to switch jobs during these shaky times might backfire on you. Unless you absolutely have to leave, you might be better off staying where you are, at least until the economic climate becomes more favourable.

6. Embrace opportunities.
If the worst comes to the worst and you do end up losing your job as a result of the recession, don’t let it get you down. There are still lots of opportunities available to you, and while some industries (construction, finance, property and the motor industry, for example) may suffer as a result of the economic slowdown, others – such as education – may not take any noticeable damage, or may even improve. If you’d planned on switching to a new career, now might be a good time, and remember: recessions don’t last forever, so even if you don’t want to switch industry, you should be able to find work relatively soon.