Having extra is usually a good thing. Whether it's extra time, extra income, or extra coffee, a little margin is typically refreshing. During tough times, “extra” anything can be hard to find. We all remember the great toilet paper shortage of 2020.
Recently experts have been predicting that somewhere in 2023 we’ll experience an economic recession, and this has the working class a bit worried, to say the least. With the cost of living rising everywhere, and employers struggling to pay their employees enough to keep up with inflation, there’s good reason for these worries. We all have a little bit less “extra” than normal, and it can be concerning to think that in the future our wallets might be even slimmer.
However, I’m here to say that although recessions come with hardship, they also provide ample opportunity for savvy individuals to capitalize on market movements. How’s a girl to survive a recession? Here are some tips to make sure you come out on top if there is indeed a recession.
Live Within Your Means
Here’s the thing: with the right principles (and continuing to put in some hard work at your day job), you can always make do with what you have. Living within your means is a concept that has served penny-pinchers well for centuries. It’s a plan that includes assessing your income level (your means) and only spending, saving, and investing with what you have. It hedges you against unnecessary debt, and can truly be a freeing way of life.
After accessing your “means,” you can employ these two tried and true ways to make sure you don’t find yourself in a hole during any recession: spend less and make more. It might sound obvious, but these tips can turn your financial state around.
Cut Down on Unnecessary Expenses
When money’s tight, one of the first places to look is your budget. Even cutting down on just one coffee a month or canceling your Hulu subscription can make a huge difference in the long run. By trimming down your expenses, you make room for margin, savings, and even investing (we’ll talk more about this later) to ride out the recession.
Get a Side Hustle
On top of cutting out unnecessary spending, you can also supplement a little income by starting up a side hustle. There are so many options for a lucrative creative outlet or passive income stream to provide a little wiggle room for your budget. Think dog walking on the weekends, starting an Etsy store, or trying your hand at some brand deals on Instagram or TikTok. Whatever you choose, a side hustle you enjoy can help you get ahead of rising expenses and feel financially secure.
Invest During the Recession
This step feels counterintuitive, but one of the best times to invest is during a recession! Financial experts recommend buying low and selling high when investing, and many stocks and funds are priced low during times of economic downturn. This means that investments you purchase during a recession might yield great returns in the future. With the extra income from a side hustle or money saved from forgoing that weekly coffee, you could be making some smart investments now that serve you well later.
Where to begin when you’re new to investing? The app Robinhood is a popular place to start, and it’s super beginner friendly. You can also check out tried and true YouTube educators like Ali Abdaal or Jensen Tung to learn more investing basics.
There’s no need to worry about a recession if you’re armed with these tips! Every recession will come to an end, and you just might find that you have more “extra” than you anticipated.