8 tips to survive the coming recession

8 tips to survive the coming recession

 

What can you do to prepare for the coming recession?

 

Signs of a downturn include:

 

·        Household electricity and gas bills are doubling.

 

·        Cost of petrol at the pumps highest it’s ever been.

 

·        Raw materials up by over 30%, cost of shipping is up 10 times.

 

·        The UK official inflation rate is now the highest it’s been for 30 years.

 

·        Food and essential household item inflation is running at 20 to 30%.

 

·        Farm prices, fertiliser and seed are all soaring, with fertiliser up to hundred percent on last year due to the rising price of natural gas used in the production of nitrogen-based fertilisers.

 

·        Food inflation is rampant and unlikely to slow this year making life much harder for ordinary families.

 

·        Families will spend more on household essentials, such as fuel and petrol, sucking money out of the wider economy which will affect company earning.

 

·        A stock market correction or crash would reduce investment, increase unemployment and loss of billions in people’s savings.

 

·        A property crash could lead to substantial losses, mass repossessions and a squeeze on lending.

 

Watch video version.

 

In a previous podcast last year, I advised followers to “invest” in non-perishable foods and household goods, as prices were likely to rise faster than most other investments you could put your money into.

 

US national debt now exceeds $30 trillion or 128% of GDP. In 1980 the US National debt was just 34% of GDP and in 2000 59% of GDP. UK national debt is over £2 trillion.

 

Greedy banks are failing to pass on interest rate rises to savers despite two recent hikes by almost .5%.

 

8 tips to survive the coming recession

 

1.      Make a spreadsheet of all your income and outgoings. I cover this in my books and many of my podcasts. This is vital if you are going to get control of your finances and a must during a downturn when your income will be squeezed.

 

2.      Tighten your belt. Cut out all unnecessary expenditure and check those standing orders and direct debit‘s to get rid of memberships and services you no longer require or use. Unfortunately, this has a knock on effect on businesses and almost becomes a self filling prophecy driving the world further into recession.

 

3.      Reduce credit card balance or pay off if possible. With credit card interest running anywhere between 18 and 40%, it makes no sense to have money in the bank earning less than 1%. You should still have a cash reserve but if you can pay off cards or switch them to lower interest or interest free deals then by all means do so as this will save you a fortune in interest payments.

 

4.      Build up a cash reserve of 6 to 12 months of outgoings. This is essential during a downturn when the job may not be safe. Everyone should have cash reserves equivalent to 6 to 12 months of household expenditure. In reality, 90% of people have no savings and are only a couple of salary payments away from bankruptcy and homelessness.

 

5.      Take a part-time job to earn extra money or change jobs. With inflation running at record rates, your income, even with pay rises, will not be keeping pace with rising costs. You may need to consider finding ways of earning extra money through a part-time job or home-based business.

 

6.      Review your investments. Review your investments to ensure that you are not exposed to a stock market downturn or crash. This includes your pension funds and any savings ISAs or mutual funds. Seek independent financial advice. Fund managers and advisers will often advise you to stay in the market even if it’s going down.

 

7.      Review your mortgage, insurance loans and suppliers. Reviewing your loans and suppliers can save your fortune and is even more important during the recession. Loyalty does not pay. I have saved thousands of pounds by switching mortgages, utility suppliers and insurance contracts.

 

8.      Finally, stay positive and plan to come out of this recession even stronger. During a recession, many people give up and say things like, there’s no point in working because nobody’s got any money. Make sure you are working harder than the competition.

 

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