Survive a recession by preparing a personal financial plan! Try our 8 step financial survival plan.
The present economic and financial crisis is similar to what Mother Nature does to animals; it tests them to cull the weakest and reward the strongest. Special skills are great, but only if these skills can adapt to new environments. And so it has been for Man who is the only animal that can live in any climate and overcome any danger thanks to his special thinking skills.
Image by Daily Mail
We are thus observing the demise of seemingly strong businesses, like banks and auto manufacturers. They were unable to adapt to new financial and technical circumstances and are paying the very heavy price of bankruptcy or last minute bail out. Unfortunately, the common individual like you and me cannot ask the government for a little loan to carry us over the crisis. We are thus forced to find the best within ourselves to become of one the survivors and not one of the dinosaurs (look at what happened to them).
An 8 Step Personal Financial Plan To Survive The Economic Recession: Be Prepared!
The following are some simple suggestions to help us batten down the hatches and get through the economic recession.
1. Look for ways to save.
Look into specific ways to save money. For instance, you can take steps to save on energy. Your house may be bleeding money because it is not properly insulated. Check windows, doors and electrical outlets with a lit candle to discover possible air currents. That’s where your energy money is going! The same goes for other areas in your life where you can cut costs (e.g. home maintenance, kid care, grocery shopping, etc).
2. Be proactive where it counts.
Most of us are lazy and/or overoptimistic when it comes to anticipating catastrophic news or events. “I’ll start tomorrow,” is the classical reply when one is questioned. Does your worst case scenario include a pink slip? If you feel that your position is about to be canceled (say if other people working with you have been fired), do not wait; start looking for another job right now and take whatever offer comes along. Take a pay cut if necessary, but don’t procrastinate, or else other people will get the job.
3. Make your finances a family affair.
Conduct a family meeting! Round up everybody, even the kids, and lay your cards on the table. Have a brainstorm on how to cut expenses, how to bring in more money, what to sell if necessary, and even how to tap some rich relatives for a loan. You’d be surprised how understanding and creative children are (alright, don’t include the baby).
4. Optimize your tax situation.
There have been several changes to the tax code, so make sure you’re handling those changes accordingly (don’t delay — it won’t be long before April is here!). “Congress also extended the life of several popular breaks that had expired. Among them is one that allows taxpayers who itemize to deduct their state and local sales taxes instead of their state and local income taxes,” according to the WSJ on Yahoo. If you live in Texas (like me), you don’t pay state income tax. So it might be a good idea, if you itemize, to keep receipts that contain your tax information so as to add it to your deductions for this year.
5. Take advantage of what’s free.
Get free stuff on the internet! Leverage what’s free and available out there. For instance, there’s a lot of useful stuff you can get online for no cost (such as software and free ways to watch television online), but you’ll have to be careful when going after these things. “So where can you find free applications without having to fear that you’re downloading spyware or viruses? Try these freeware sites: Download.com, SnapFiles, and Six Files,” is the good advice given by Consumer Reports on Yahoo Finance. We spend way too much on stuff that we can actually get for no cost.
6. Need a job? Check out recession-proof jobs.
See where you can find job security. Why not find the best jobs to ride out a recession? Just a few days ago, a young friend of mine returned to the States after a year of teaching in Central America. She had no job, and was facing a very weak market; yet, she found a position in less than 2 weeks in Houston. Yes, teachers in some areas are in high demand, so why not consider the possibility? If your area is Math, Science, English or special education, there is a quick way to obtain your certification. Math and Science specialists willing to teach are the focus of an intense campaign by the federal and state governments. Check your State Education Agency for details.
7. Keep your resume polished and updated.
You’ll never know when you may need it, so I’d suggest that you always have your resume on the ready. There’s a lot of good advice (online) on how to present a good and efficient resume. If you still feel that you can’t do it alone, hire a pro online (for example: Go Freelance, Resume Rabbit). It’s worth the low cost to present a resume that’s well organized and free of grammar and spelling mistakes.
8. Keep connected and stay in touch with your professional network.
Don’t be caught by surprise like an ostrich with its head in the sand. If you keep your communication lines open, especially with your colleagues, you’ll find that they can serve as a safety net if you’re ever in between jobs. During an economic recession, it becomes so much harder to find and switch jobs due to higher unemployment rates and the greater number of job candidates on the prowl. To have a professional network of colleagues who can refer you to new positions becomes a huge asset during a weak job market such as the one we’re facing now. Make sure your Linked In profile is up to date! And ping your friends and co-workers on occasion, just to touch base and see how their jobs and companies are treating them. It’s a good way to keep tabs on the job market where you are!