There is no doubt about it, the U.S. economy remains in a bleak and gloomy state. The unemployment rate looms ever constant at 8.1 percent, and I see more and more people laid off every day. Then, there are the folks I know who are not yet laid off. And I watch as my friends and family live under an economic dark cloud, wondering if a pink slip is forthcoming tomorrow or the next day -- because more layoffs are on the horizon, reaching from Wall Street to Main Street. As a result, I have taken six specific steps to recession proof my entire life.
I got control of my budget
Not having a money blueprint is not just a dumb move; it can destroy you in a recession. I got hold of my cash, made a budget and stuck to that budget like glue.
In my world, budgets are living, breathing entities all their own. Thus, I am always tweaking mine, making cuts where I need to and making my new and improved budgets even better than the blueprint I had the month before. For me, simply have a plan has been a financial hedge of protection that I see many folks going without -- and suffering as a result.
I used more cash
I live a cash-only life, meaning I only buy what I can afford, not what I can afford to finance. From there, I take out certain elements of my budget in cash each month: my entertainment budget and dining out budgets specifically. When the money is gone, I put "fun" on hold in favor of fiscal responsibility.
I have multiple streams of income
I do not just advocate working smarter and not harder, I walk the walk. I invested my savings in two recession proof businesses, used my personal income from those to save up, and am now investing in even more companies. I also worked on several dot com startups, and I can currently say that I am thriving, even in the wake of our national economic woes. In a recession, entrepreneurship can mean the difference between living and living well.
I monetize my life
There is no area of my life I overlook when it comes to making cash. I leverage cash back rewards cards to pay my bills. I pay that card off with a cash back debit card. I also leverage cash back for my every day, monthly purchases. I buy my cleaning supplies, personal hygiene items and beauty products via a cash back shopping portal, earning me even more money back on top of my cash back rewards cards. For me, recession proofing is just as much about smart saving as it is smart spending.
I save more
I put my savings on autopilot. I automatically deduct 20 percent from my biweekly checks and put that directly toward my savings and retirement. For me, out of sight means out of mind and makes me less inclined to spend my hard earned resources on frivolous buys.
I spend less ... a lot less
Before I spend a dime, I consider how much work it will take me to pay the equivalent for that blouse, bauble or trinket. In most cases, this gives me the resolve required to avoid impulse buying, keeping me forever on the financial straight and narrow.
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More from this contributor:
- Banking & Budgeting
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