8 Tips for Living Through a Recession: How to Survive a Recession
Given the craziness with COVID-19 and its impact on our financial situation as a whole, you’re probably wondering whether we’re in a full-blown recession. Though experts can’t really agree on what will happen in the upcoming months, it’s safe to say that living like you’re living through a recession will help.
Whether you’re temporarily or permanently laid off or lost a much-needed source of income (like part of your business), you may not want to hear suggestions for turning a bad situation into an opportunity. In fact, the idea of turning challenges around for your own benefit is in line with the annoying soundbites that productivity gurus sell.
However, adjusting and reacting to your situation is the best way to survive the current economic climate. Here are some tips for surviving a recession.
1. Reassess your finances
Living in a recession means that many people’s income situation has changed. If that’s the case for you, this is an excellent time to see what your spending habits are like and whether your budget is working for you. Maybe you’re struggling to keep up with rent payments and find yourself relying on your credit cards for everyday purchases, increasing your consumer debt load. Or perhaps you’re fine after cutting back on expenses but aren’t sure whether to keep investing at the same rate.
In any case, re-evaluating your goals, income, expenses and even your savings and retirement goals are crucial when you’re trying to understand how to live through a recession.
2. Take a careful look at your skills
It’s easy to believe your current skills aren’t needed or appreciated, especially if you’re finding it hard to get a new job after being out of work. In contrast, this is a good opportunity to think creatively about different ways to apply your skills or hone your other talents.
For instance, did you have a minor in a different area than your major in college? If so, chances are you have marketable skills you haven’t taken advantage of. Perhaps you minored in computer science–programming skills tend to be highly sought after. Use what you’ve got to improve your chances of getting hired.
3. Turn your hobby into your own business
This is a great time to use your skills from working on your hobby for years into a side-hustle or side business. If you don’t have a job (or are working fewer hours), it’s a great time to see if what you do can be profitable.
If you’re not sure where to start, there are plenty of websites that act as a marketplace of sorts to advertise your skills. For instance, Upwork is a website where many business owners or hiring managers look for contractors with specific skills (like photography or writing)–many people have earned good money finding work there.
Other places include TaskRabbit where you can create a profile and offer help such as assembling furniture, gardening and more. Don’t forget Fiverr, where you create a listing for your particular skill (seriously, so many people sell unique services there!). With all these websites, the more high-quality work you do, the more your ratings will go up. Hopefully, it will increase your chances of being hired.
Related: Clever Gardening Secrets
4. Go back to school
There are so many options to earn another degree or to learn a new skill. Places like Udemy make it super simple to do so. Since most of us aren’t leaving home these days, many places offer classes online from the comfort of your own home. The skills you learn can help you become more marketable in the eyes of your current or future employer.
However, don’t just focus on the return on investment (ROI) for the funds you put into additional education. Learning a new skill or studying an interesting topic has an intrinsic value that can’t necessarily be measured by finances only.
5. Consider frugality
Being more frugal doesn’t really need to take a lot of time. Sure, you can do things like extreme couponing or driving around multiple stores to get the best deal, but you don’t have to. In fact, you can use online couponing sites or browser extensions to do much of the work for you. Plus, there are other ways, such as being more mindful of what you purchase.
Frugality means different things to different people, living through a recession provides an opportunity to explore and decide on where you can intelligently save money.
6. Eliminate your credit card debt
Credit card interest is expensive–especially if you don’t have enough income to cover the minimum payments. If this is the case, look through your expenses first to see what you can cut back. You might be surprised to find out that you can stop using credit cards–a debit card is a great alternative if you can’t spend physical cash at the local grocery store.
While you’re at it, check to see what the fees are for your current bank–there is no need to pay any fees, seriously. Financial institutions such as Axos Bank, Chime, Empower and Radius Bank don’t require monthly maintenance fees or balance minimums. Plus, there’s the opportunity to earn a higher interest rate compared to traditional bank accounts.
To get rid of your credit card debt, first try to call your credit card companies to see if they can assist you by lowering, eliminating or deferring your payments. If not, perhaps they will lower your interest rate. It never hurts to ask.
Otherwise, consider strategies such as the debt avalanche or debt snowball to get out of debt as soon as you can.
8. Sell your extra stuff
The great thing about the internet is there are so many places to sell your items online. Places like eBay, Facebook Marketplace, Poshmark and Mercari have enormous reach and can help you sell your items much quicker. There’s a market for practically anything, really–your clothes, your furniture, your electronics, your art, your classic video games, and your baseball card collection gathering dust in the attic.
Don’t expect to make a ton of money unless you have highly-prized collectibles. Still, it’s worth a shot to get some money in to help pay the bills.
What other recession tips would you add?
Article comments
These 8 tips will help you continue to live whether we are in a recession or not. Good information to remember.
Excellent article. I recently have decided to devote more time to working for myself…out of necessity rather than by choice. Before, I was too scared to try it. I’m still scared, but not having a lot of other options has proven to be the shove needed – we’ll see how it all goes!
Baker is so right. I hear people complaining now that times are “bad” because they overspent so much when times are “good”. They were in debt before but now are finding credit card companies and banks are tightening up. What some people call frugality(cooking meals, mending, making things last) has just been common sense to me although I have had a good salary for some time. Carrying a large credit card balance when most of it is made up of clothing and “toys” you don’t need, lots of meals out, and stuff (you bought it but what, why and where it is now? when you are still paying it off) is just wrong. This is the case with a lot of my co-workers- who still go to the mall 2-3 times a week across the street and come back with more junk on several credit cards on which they are paying minimum payments- I hear the conversations but don’t feel my advice would be wanted(STOP SHOPPING AND STOP COMPLAINING)
Great post and terrific tips. One other suggestion for good and bad times is to celebrate financial victories, big and small. One thing I encourage people I counsel is that when they pay off a debt or establish an emergency fund, to take a bit of the money you have saved and do something special with it. Doesn’t have to be anything elaborate but the psychological effects of celebrating accomplishments is helps one continue to strive for more goals.
Some great tips. I’m not so sure about number 7 though lol. I love my protein too much 🙂
Paying off my credit cards and debt certainly has been a high priority.
Very good article! I think utilizing a second skill set when having lost your job. I’m discussing that option with my girlfriend right now as she lost her job in January, due to cutbacks of course. Thanks for the ideas!
Fantastic list! One very important thing to remember is to try to keep as positive an attitude as possible – no matter how bad it gets. We can’t give in to the doom-and-gloom that bombards us in the media on a daily basis.
A few observations:
There’s nothing wrong with eliminating meat from your diet for whatver reason but it might be more realistic to either reduce portions or use it as something other than the “main” dish.
For example, serve steak but instead of a ten-ounce, try a 6 or 7 ounce and serve more vegetables, salad and rice or potatoes or whatever.
Or make meatballs, a stew, stuffed cvabbage, dumplings etc. Stir fries are easy and fast, too!
I also look for ways to reduce “fixed costs.” I go to the library and borrow books, DVDs and CDs. I can read magazines there, too and save money on subscriptions. I also let my cellphone contract end and switched my number to a prepaid phone. Co-incidentally, I came across this article on the subject.
The point is that you can save money if you rethink everything you do. Savings can be had without dramatically changing your life… for now.
Yes, prepid is an excellent suggestion. Tracfone’s deal with $20 for 3 months seem well suited for infrequent users, those who need to be reached and have a phone for emergencies.
I am trying to see if I can find some online classes to further my skills in my industry. Have you had any experience with taking online classes?
The pro-vegetarianism article in tip 7 doesn’t seem to apply to a short term recession, as basically the only argument they have that it’s cheaper is that it lowers your medical costs. Even if you buy the argument at face value, by the time you would start to see the savings the recession/your joblessness would hopefully be over.
The prices quoted are not very useful because they are per pound instead of per calorie. Also the meat prices aren’t the cheapest cuts (perhaps not even accurate); ground beef, whole chickens, etc are not listed. I would like to see someone compare a pound of ground beef bought on sale vs. a pound of beans from the bulk bin on a cents-per-calorie basis. I don’t know which way it would come out, but at least it would finally be a fair comparison.
I keep hearing that a vegetarian diet is cheaper, and I am quite interested in the topic, so I am looking for information proving it one way or another. I haven’t found it yet!
Lentils at $1 per pound retail cost about $0.001 per calorie and $0.009 per gram of protein. Chickpeas/garbonzo beans at about $1 per pound retail cost about $0.0009 per calorie and $0.013 per gram of protein.
Great article! I especially love point #2. My husband lost his job (twice) two years ago, when the tide started to turn in the advertising business (he was in newspaper advertising sales). It took a while for him to find a new job, and eventually he ended up doing something that was a hobby for him in college (sports announcing on the radio). He loves it, and he’s much happier than he was in sales.
Thanks for mentioning the big list of frugal tips from my readers!
Wow, very nice article. I think the only thing I regret is that you rarely see articles like this during great economies. A lot of these steps are even more effective if you can get yourself to apply them during the good times, before the storm comes rolling in!
Keep up the good work!
Great tips! The recession has not really hit us job-wise; however, we are trying to sell a house and we might have some monetary setbacks if it ever sells. Nonetheless, we have done things…and actually started before the economy took a nosedive. We are aggressively paying down credit cards and have stopped using them altogether (except for business expenses that are paid within 30 days). We have started shopping smarter and saving money on groceries. We think before we spend!!! I deferred looking for a job and instead took a postdoctoral research position that will last until summer 2011. Hoping things look better by then!