When it comes to recessions, it’s not a matter of if we will get another one. Instead, it’s a matter of when we will encounter the next one. Can you avoid financial disaster if another recession were to come down tomorrow? This article will give you a couple of tips to avoid the pitfalls of becoming unable to take care of yourself and your family.
Pump Up Your Bank Account
It’s when you have money that you should start putting away some cash in your bank account. If you can live off your savings for at least six months, then you can go on to the next step. If not, start by socking away at least 10 percent of each paycheck into an emergency fund. While you’re at it, make sure you’re banking with one of the good guys.
Take Down Your Dependency Rate
The rate at which you depend on your work income is your dependency rate. So if you spend 90 percent of every paycheck on your expenses, then 90 percent is your dependency rate. You will want to work to take down the amount of money you spend from each paycheck, even if you get a raise. By spending less, you do the hard work that will not only make you recession proof but will make saving for retirement a lot easier.
Keep That Resume Updated
In this economy, a recession-proof job doesn’t exist. For this reason, you will need to keep your resume updated at all times. You never know when you are going to need to hunt for a new job. When you upgrade your resume when you don’t need to do so, you eliminate the worry and desperation that will come when you’re trying to get a job to avoid bankruptcy and other financial pitfalls. According to Bankruptcy Law Office, be sure that you research all of your options before filing for bankruptcy, so that you fully understand how this choice will affect you.
Think About Getting a Side Job
These days, you can easily get a side gig and make more money to put towards your expenses, emergency fund, and retirement. You can do anything from driving people around town as an Uber driver, selling products on eBay, and designing websites for clients around the world. Almost any skill you have can get turned into a side gig, from a flair for writing well to a high amount of knowledge about social media.
Pay Down Your Debt
You want to work so that your debt amount is low and your credit score high. Your debt to asset ratio is an important factor in determining your overall credit score. Got bad credit? Do something about it, but watch out for credit repair scams. Do whatever you can to pay off any debt you have, whether that includes side gigs, selling possessions you no longer use in a garage sale or coming up with a stricter budget.