BUSINESS CENTS
13 Steps to Recession-Proofing
Your Finances
Article by Ariela, Facty Staff Updated: Mar 31, 2020
from facty.com website
balances. For substantial debts, consider debt consolidation. These loans pay off high-interest balances and restructure them into a single, lower-interest payment. Do your research, speak to a financial advisor if possible, and make sure the consolidation company is verified by the Consumer Financial Protection Bureau before taking out another loan.
2. Calculate Essential Monthly Expenses
Monthly expenses will add up quickly if you're not careful. That mid-tier video streaming package might not seem expensive, but when the cost of electricity goes up in the summertime, you may find yourself a little short on cash. Knowing your fixed expenses is crucial to surviving all seasons and avoiding surprises. Go through all of your monthly expenses and separate your needs—such as utilities, rent, and auto insurance—from your wants, like gym memberships or subscription services. Once you realize how much cash you need for the basics, you can start trimming unnecessary expenditures and saving money.
Maintaining your finances can be an overwhelming business. Most of the time, everyday expenses, work, and family obligations command our attention, but it's important to also spend time on a financial plan for the long term. Few circumstances prove this fact better than an economic recession. Defined as a period of reduced economic activity, a slump in the economy could mean reduced wages, layoffs and financial hardship for millions of Americans. Don't rely on luck for financial stability. Recession-proof your finances today to ensure you survive the next economic downturn.
1. Eliminate Your Debt
Debt is inevitable. From auto lending to mortgages to student loans, it seems that every major life event comes with a significant price tag. From credit card balances to large purchases, most of our monthly expenses are often liabilities. If you have substantial debts other than a mortgage, you should focus on paying off those balances first. When a recession hits, you'll need as much cash flow flexibility as possible, not outstanding