Recessions don’t happen often, so all this talk of a looming recession may be a little scary. The most recent recession occurred over 10 years ago, from December 2007 to June 2009. If you are under the age of 30, you may not even recall the impact of the last recession.
Since 1945, there have been 11 recessions, which lasted 11.1 months, on average. The shortest was six months, the longest 18 months. We will have another recession, but the fact is, no one knows when the next recession will occur. It could be in 2020 or further into the future. No matter when the next recession strikes, you need to prepare your recession-proof budget today.
Recession-Proof Your Budget By Reducing Debt
You should develop a systematic plan to minimize your debt levels. Start by eliminating high interest rate credit card debt. If a recession hits, you don’t want debt eating into your budget. If you need help super-charging your debt reduction strategy, consider a Debt Management Program through Apprisen. You may be able to reduce your interest rates and pay off your unsecured debt even faster than you could on your own. Having an expert on your side will help reduce the stress you are feeling and help you start your debt-free journey.
Recession-Proof Your Budget By Diversifying Your Income
Building out multiple streams of income now could help you pay off debt more quickly and prove essential in supplementing your budget during a recession. Many people experience a salary decrease or even job loss during a recession. Could you drive for a ride share, babysit, or sell items on-line? Choosing a sustainable, flexible side hustle may be the key to keeping you afloat during the next recession.
Recession-Proof Your Budget By Planning For Doomsday
But it is also important to build a doomsday, or crisis budget. This is a budget you can pull from your desk drawer if things aren’t going well for you financially. Go through each item on your normal budget and identify what is essential (food, medicine, rent, utilities) and what is not essential (meals out, cable, subscriptions). Hopefully, you’ll never need this crisis budget. But it is a worthwhile exercise, so you’ll be prepared if you ever do experience a reduction in income or job loss.
You may even be able to identify some budget items to eliminate now and apply that savings to reducing your current debt!