Recently, economists have revealed that Covid-19 has caused the worst recession the United States has experienced since World War II. Millions of people are out of work, and plenty of others have concerns about their finances, ability to weather this and how to survive a recession.
Whether you’ve recently lost your job or want to make sure you and your family are secure from a financial perspective, read on about how to survive a recession.
Take Advantage of Assistance Programs
Remember, there’s a variety of assistance programs in place to help people survive an economic downturn. If you’ve recently lost your job, don’t wait to apply for unemployment benefits or unemployment insurance. There are also programs like SNAP (Supplemental Nutrition Assistance Program) that can help you to get groceries.
It’s a good idea to look into these programs as soon as anything happens. Knowing what’s available will reduce your stress. You’ll also be aware of your options and can take action sooner for yourself and your family.
Reduce Your Expenses
It doesn’t matter if you’re unemployed or still have a job. Either way, now is the time to reduce your expenses.
Spending less while you’re looking for a new job will help you stretch your dollars a little further and ensure you have enough to cover necessary costs (rent, utilities, groceries, etc.). If you spend less while you also have money coming in, you can pay down debt faster and/or put more into your savings account so that you’re more comfortable if the anything unexpected happen.
Go through your bank statements from the last couple of months and look at your spending. Where can you cut back? Do you need to get rid of your subscriptions or stop eating out as often? Work together as a family to decide what you’re going to do to save money.
Assess Your Future Plans
Now is a good time to assess your plans for the future, too. Were you planning on making any big purchases (upgrades to your home, a new car, etc.)? If so, you might want to rethink those. Consider your current situation and ask yourself how moving forward with those plans could affect your finances.
Consider your plans for the future when it comes to your living situation as well. For example, is your lease going to be up soon? If so, does it make sense to downsize and move to a smaller apartment or house so you can save money on housing?
Start Building Up Your Savings
In an ideal world, you’d have enough money in your savings account to cover your bills for between three and six months. If you don’t have enough saved for this, start focusing on adding money to this account. This is especially important if you’re still working.
You might even want to consider picking up a side gig. Delivering food for GrubHub or groceries for InstaCart will help you bring in some extra cash that can go right into your savings account. Selling items online is another option that you can use to give yourself a bit more of a cushion.
Maintain or Improve Your Credit Score
Let’s say you lose your job and find yourself in an emergency situation (someone needs to go to the hospital, your car breaks down, etc.). You might need to take out a loan to cover that emergency. If you have a low credit score, you’re going to be met with higher interest rates or a harder time qualifying for that loan.
This is why it’s important to start working on improving your credit score now. Make it a priority to pay down your debt and make sure you’re paying your bills on time so that, if you do need a loan or line of credit, you can get one right away.
Update Your Resume
Even if you have a job and feel fairly secure in it, it doesn’t hurt to update your resume. If you do so now, it’ll be easier for you to start distributing it and applying for new jobs in the event that you do get laid off.
Sit down and update your LinkedIn profile, too. This will help you find jobs online for which you’re qualified and will save you from having to deal with the stress of juggling updates later on.
Develop New Skills
Most of us are spending more time at home than usual these days. Since you’re not able to go out and do other things you used to enjoy, why not dedicate some of your newly found free time to learning a new skill? There are lots of free courses out there that can help you learn basic coding and other skills that will make you more marketable should you find yourself applying for a new job in the future.
Play the Long Game
An economic recession is not a great time to be taking risks with your finances. Be conservative with your investments and avoid acting on emotion when making any money-related decisions.
Keep a cool head, be patient, and play the long game. If you’re considering taking any kind of action with your finances, talk to your family or someone you trust before pulling the trigger. This will save you getting into difficult situations because you were trying to make money as quickly as possible.
You Know How to Survive a Recession: Now What?
It’s perfectly understandable that you’re worried about finances during Coronavirus. It’d be strange if a pandemic that’s put millions of people out of their jobs didn’t have you feeling concerned.
The good news is that there are steps you can take to prepare finances for a recession and minimize the damage caused by COVID-19. Keep these tips on how to survive a recession in mind and you’ll have an easier time making it through this difficult period. If you need more help managing your money, check out some of the other resources on our blog today. This article on available job opportunities is a great one to read next.
Are you considering taking out a loan to help you stay above water? If so, we can help at Jora Credit. Learn more today about our convenient cash lending services and apply online to get anywhere from $500 to $2,600.
For more personal finance tips, check out our other blog posts.