Tips For Surviving An Economic Recession

The 3 Prong Approach to Hanging In There

When the economy goes south and the media bombards us with grim news of escalating unemployment, company bankruptcies and home foreclosures, it sure sends a shiver down your spine.

However, If you go down history lane you will see that bad times and good times are just part and parcel of the cycle of life. It would be immature to expect global financial prosperity to increase positively ad infinitum.

As Jim Rohn, the great motivational speaker wisely put it, every 10 years is very much like the last ten years. Some years have more opportunities than challenges and some years will have more challenges than opportunities. You have guessed it right - these are the years when we are faced with more challenges. But all the same, opportunities do exist.

The good thing about all this is that bad times do not last forever and new opportunities arise amidst the doom and gloom. I will offer you 3 simple tactics to see you through the tough times. If you stay positive and search and ask and knock, you will survive and set yourself up for greater success when the tide turns.

Tip Number 1 - You need to learn new things. Albert Einstein, the science genius said we cannot improve our situation unless we first improve ourselves.

1a) You therefore need to learn new ways of making money to safe guard your current lifestyle or replace a failed source of income. Be creative and use the skills and knowledge you have or go to school and acquire new skills.

1b) You can also make use of the large availability of skills and knowledge of the people who have been laid of. Can you imagine how expensive and difficult it would be to tap into this labor market when the economy is at its peak? This is a golden chance to partner with others who are waiting for someone like you to shine a light in their gloomy tunnel.

1c) Reduce the amount of time you watch negative news and listen to friends and family complaints. If you commit your life to negative things you will feel discouraged and hopeless and hence attract the same things you fear in your life.

Tip number 2 - You must change your habits and attitudes towards money. According to David Bach, author of "Start Late, Finish Rich", 50% of Americans have less than $50,000 in savings. In fact almost a third (30%) have less than $1,000 in savings. This means the average family does not save for a rainy day. Well, it is raining heavily now and it is hurting badly because families do not have adequate savings to sustain them as they look for alternative sources of income.

2a) Create a budget, examine your bank accounts and credit card accounts with a surgeons scalpel and slash off unnecessary expenses and stop the bleeding. Remember to focus on the big expenses too. We all have a habit of focussing on the small stuff and we forget the items which have a large impact on our finances.

For example. If you cannot afford to rent a 3-bedroom apartment, i am sorry you worry so much about the Joneses but please down grade next month and save a couple hundred bucks. Downgrading your lifestyle is an economic strategy and should not mean you will never rise up again.

2b) You also need to stop spending what you do not have. Most people confuse credit cards with money and they assume available credit means money in the bank. If you recognize the difference you will save yourself high interest fees and unnecessary and unaffordable expenses.

Tip number 3 - Invest your money. Keep your money in accounts that generate income. Avoid keeping money in non-interest earning or low-interest earning accounts e.g. checking accounts and bank saving accounts.

3a) Look out for high interest earning money markets and certificates of deposits which are federally insured to protect you against bank failure.

3b) Longterm investments should mainly be in stocks that pay dividends. This ensures you will receive an income as you wait for the stock market to improve and for stock prices to rise.

Above three tips can be summarized as personal development that creates additional sources of income while investing funds in accounts that generate income in excess of the rate of inflation.

You can also read the following hub on money saving tips http://hubpages.com/hub/Ten-Common-Mistakes-About-Money