With your 401K looking more like a 201K and unemployment statistics in the double digits, there's no denying we're in a recession. Even if you weren't prepared for it, that doesn't mean you can't rise above it. Here are strategic five ways to put the recession into perspective â while continuing on a path of personal progress and profit.
1 â Re-examine Your Priorities
Even college-educated and financially stable individuals could benefit from an earnest self-evaluation. For years we have been conditioned into a life style of consumption. If we want a cup of coffee, we buy it; when we see the newest "status mobile" we want to drive it and when the latest electronic gadget hits the store, we stand in line for it. Consumption has almost become second nature to us â but, we can all step back, regroup and redirect.
Putting more emphasis on our "quality of life" can help to reduce our "quantity of life" thinking. Making a greater contribution to family, friends and community can help us all redirect. If we spend more time than money on our major focus, we can put ourselves into a position to alleviate economic pressures.
2 â Renegotiate Major Expenses
Businesses are now sensitive to the trend of their clients looking for bargains and some would rather renegotiate an existing contract than lose a good customer. Review all major expenses â housing, telephone, cable, credit cards, etc. Compare pricing and incentives for the best offers â then call your current provider to renegotiate or switch to a company who delivers the service you need at a better price.
3 â Reduce Your Expenses
It may seem trivial, but $2.75 for a boutique coffee plus $7.50 for a drive-through lunch and $1.25 for bottled water equals $11.50 per day. That calculates to $80.50 per week or $4,186 per year. These are just a small sampling of the type of expenses we've grown comfortable with in the past years. Eliminating these types of expenses from your daily, weekly or monthly budget will provide money to save and help establish a comfortable cushion during the hard times.
4 â Divest and Invest
Do you have hidden assets? Look for items in your home, garage or personal workspace that you no longer need. If you're not using them, sell them. If you can't sell them, donate them. Divest of all nonessential items for cash or a tax deduction â then invest the gain and the money you save by cutting your expenses. Select "recession-proof" investments which pay dividends even in a slow economy. Utility, food, pharmaceutical and health care services are required in all economic climates. Research the stability of any venture and then systematically acquire safe investments for your portfolio.
5 â Become a star performer. Employers retain and recruit the cream of the crop when times are bad â they don't have extra cash to carry dead weight. Become a star performer in the workplace. Take on projects to increase your visibility and value. Enhance your experience and education. Take advantage of employer reimbursement education programs or external grants. By striving to become the first to be hired and the last to be fired, you can protect your income even when jobs are scarce.
With thought and effort, you can have more control over your personal and financial destiny. By putting things into perspective, overhauling your spending and redirecting your actions, you can position yourself to weather the current recession and even rise above it.