Eight Tips for Living Through a Recession

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Last updated on June 20, 2018 Views: 547 Comments: 15

If you have been affected by the recession, perhaps by losing a source of income, 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. But I firmly believe that it’s best not to let things happen around you without reacting and adjusting. Here are some ideas to keep you moving while the world is slowing down.

1. Reassess your finances. If your income has changed, you may find yourself increasing debt at a faster rate or worse. I suggest going back to the beginning by following the map set forth in Take Control of Your Finances. This involves reevaluating your goals, your income, your expenses, and organizing your savings and investments.

2. Consider your primary and secondary skills. If you are out of work, and particularly if you have experienced difficulty finding a new place of employment, it is easy to feel your skills are not appreciated. Perhaps this is a good opportunity think creatively about different ways to apply your skills or hone your other talents. In college, did you have a minor in a different area than your major? If you did, chances are you have marketable skills in some other activity. During my first two years of undergraduate studies, I had difficulty choosing my minor, switching from computer science to psychology. If necessary, I would enjoy pursuing either of these paths.

3. Turn your hobby into your own business. I have found that many people are reluctant to take the avocation they enjoy and turn it into a profitable endeavor. I can understand this; I work almost constantly these days between my day job and everything else I do. But if that day job were to disappear, there would be no question that I’d use this as an opportunity to ramp up my projects. I have already turned my hobby — blogging and building communities — into a business. Now my newer hobby is photography. I have tons to learn about this new hobby (and I still have tons to learn about personal finance), but if blogging were my “day job,” I might have take on photography as a more serious hobby, and possibly turn that into a business of its own.

4. Go back to school. Modern educational technology has made it convenient to earn another degree. You can take classes online in the comfort of your own home or you can go on campus and hang out with the young co-educational students. Do not 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 intrinsic value that can’t be measured by a financial analyst.

5. Consider frugality. I admit I’m not a big fan of most frugality tips out there. In the past, many frugal tips have required a lot of effort and therefore remained under the domain of people without other timely responsibilities. But online coupon websites and other modern technologies take a lot of work out of frugality, so this now is an option for more people. Frugality means different things to different people, so today’s recession provides an opportunity to explore and decide on where you can intelligently save money.

Check out this extensive list of frugal tips from Being Frugal.

6. Eliminate your credit card debt. Credit card interest is expensive. You don’t have to be frugal to realize that interest is in most cases an unnecessary expense if you spend less than you earn. If you’re out of a job, this can be difficult, particularly if you do not have enough income to cover the minimum payments. Call your credit card companies to see if they can assist you by lowering or forgoing your payments until your income returns. If not, perhaps they will lower your interest rate. It never hurts to ask, and ask a supervisor if the first customer service representative won’t provide satisfaction.

If you do have income, start the debt avalanche, the least expensive, quickest, and most efficient way to get out of debt.

7. Eliminate meat from your diet. I love a perfectly cooked, rare filet mignon. But meat, even steak from the grocery store, is expensive.

If you drop red meat, poultry and fish from your diet, you’ll find plant proteins cheaper than the equivalent amount of animal protein. The cheapest cuts of beef, such as ground round, average $3 per pound in U.S. cities (lean and extra lean); boneless chicken breasts cost $3.40 a pound; and canned tuna is about $2 per pound. Contrast that with dried beans and lentils at less than $1 a pound and rice well below $1 per pound… Even tofu, the chicken of the vegetarian world, is usually well under $2 a pound. Go Vegetarian to Save Money, MSN Money

Healthy diets help you save money later in life with fewer visits to the doctor.

8. Sell your extra stuff. The great thing about eBay is its enormous reach, bringing people from anywhere interested in owning anything closer together. There’s a market for practically anything transferable on the auction website. Sell 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 consistently make a lot of money selling your old items on eBay unless you own something truly rare. One drawback of the aforementioned reach is that lots of people are selling the same things you are.

But if you can create something original and use eBay to sell that product, you may be in a good position to earn a consistent income.

What would you add? How are you surviving this economic recession?

Article comments

dawgette says:

These 8 tips will help you continue to live whether we are in a recession or not. Good information to remember.

Laure says:

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!

Anonymous says:

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)

Anonymous says:

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.

Anonymous says:

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.

Anonymous says:

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!

Anonymous says:

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.

Anonymous says:

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.

Anonymous says:

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.

Anonymous says:

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?

Anonymous says:

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!

Anonymous says:

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.

Anonymous says:

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!

Anonymous says:

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!

Anonymous says:

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!