Recession Proof My Finances
Finance News You Should Know
Today you probably haven’t been able to get away from all the recession talk but the reality is the GDP report that was released today showed us all what we already thought was happening. We are in a recession. The GDP (Gross Domestic Product) report, which is used to track the health of a country’s economy, showed that this US had reported its 2nd Quarter of negative growth. By definition a recession is a significant and extended downturn in economic activity. When a country has two consecutive periods of negative reporting it is commonly referred to as a recession.
Why is it important?
A recession can have effects on many different areas of your life and business. Companies could start cutting back on hiring or start laying off employees resulting in loss of income for you and your family. Reduced income leads to lifestyle changes that lead to lasting effects on small businesses. The cost of doing business can increase and have a significant impact on small businesses trying to stay afloat. The reality is that a recession has many impacts and can cause many people to worry about what they should do next.
Recession Proof Your Finances
This can apply to both your personal and business finances.
1. Reassess your income and monthly expenses. Does your current income that you are bringing in cover all your bills? If not begin, thinking now of ways you can bring in more money. Cut back on the things that you no longer need. The goal is to put as much money back into your budget as possible.
2. Avoid making impulsive financial decisions. Map out your big purchases and have a plan for your finances that you will follow.
3. Build your cash reserves. Now is the time to start working on building up your savings. The goal is to have 3-6 months of your expenses saved, but if you can’t do that right now start with 1 month and build from there. No matter where you start, now is the time to start putting money back in the event you have an emergency.
What should I do next?
If you are concerned about your personal or business finances now would be the time to speak with a finance professional. Having a strategy for your finances reduces financial stress, anxiety, and worry. If you are ready to recession proof your finances, we are opening up our calendar to help you with your financial strategy.