Cash is the key
Try to use cash rather than credit cards or loans. Even debit cards are not good to use to purchase items during a recession. Recession sufferer don’t have extra cash on hand in case the bank or the merchant makes a mistake and overcharges for goods or services. It can take quite awhile to get the money back, if it is ever returned. Pay for your goods and services with cash and you will avoid this headache.
Open a savings account if you don’t already have one
Work on saving 3 to 6 months living expenses. If you are living paycheck to paycheck this can seem like a difficult thing to do. Take a look at your budget and decide how much you can save each paycheck. Even if it is just $5 it is better then not saving anything. After you have decided how much to put aside, make it a habit to put this money in your savings account when you first receive your paycheck. Put the money away before you pay your bills. One of the problems that people run into when attempting to save money is spending all of the money on bills and entertainment then realizing later that they don’t have the money to save. Putting the money in your savings account first will ensure that the money is there for you later.
Cut back your expenses in creative ways without hurting your lifestyle
Stay at home with the family and some good strong coffee rather than running to your local Starbucks. Many libraries have extensive video collections and this can lead to huge savings from movie rental costs. Take a careful, creative look at all of your expenses to see if there is a big ticket saving opportunity that can save you over $100 a month.
Remember, there is no reason to panic
A recession is not necessarily the best time to convert your 401k or other investments into cash. If you still have more than a few years before your planned retirement, your portfolio will most likely not only recover, but will actually earn you more money. Historically markets always rise. Times may look bleak at the moment, but markets always rise even after big declines.
Don’t create a spending freeze
You are also a part of the economy. While it is wise to find many ways to save money, remember that as you purchase items and services you are contributing to the finances of others who are struggling just like you.
Produce your own food
Even if you live in an apartment you can grow your own food. Growing bean sprouts is very nutritious and very easy and anyone, no matter what size their living space, can grow them. If you have a balcony and good weather you can grow many fruits and vegetables in containers. If you live in a house with a yard, you are just wasting your space if you are not growing at least a few seasonal vegetables. You will be amazed how much more tasty home grown food is and the nutritional value of garden grown produce is higher that mass-grown foods.
Barter for goods and services
Is your friend or neighbor a better cook than you? Are you very handy around the house and could you use this talent to help someone else while they are helping you? Not only does trading with others help save you money, but it builds community spirit.
You have the power to help yourself and others during a recession. Remember to think clearly, be creative and you will find yourself very successful during hard times.