Saving Money in a Recession

According to many economists, we’re either quickly heading for a recession or possibly already in one. Either way, it’s probably a good idea to have some type of a plan to handle a slowdown in the economy or a full-blown recession. A recession proof portfolio is one such way to get your financial house in order. You can begin moving your capital into those investments which tend to do better in a slowdown, as well locking in interest rates while they’re still relatively high and diversifying your portfolio a bit.

Still, for those folks out there that don’t really have an investment portfolio, there’s things you can do to better prepare yourself for the dips in the economy. A lot of this is simply common sense and repeated to the point of becoming cliche. That is, live a bit below your means…or, make more than you spend. Well, that’s all well and good, but it’s either very difficult to follow this advice or just flat out impossible. Some people are simply strapped in the best of times. They’re already living on a very thin margin without a lot of wiggle room.

In a time of recession, however, you’ve really got to dig a bit deeper. Unless you’re the cheapest of the cheap, there’s always a little room for improvement. First thing you need to do is put it all down on paper. Figure out exactly where the money is going…to the last penny. Remember that just about everything you do has some sort of financial implication. This includes how fast you drive, how much coffee you drink, how hot/cold you keep your house, the type of food you buy at the store, the clothes you wear, etc.

Specifically, though, there are some things you can do to help save a little money during a recession. After you’ve gone through your list of expense, see where you can make some cuts.
* Save when you drive – Slow down a bit while you’re driving to save a little gas and only drive when you really have to…or stop buying gas altogether.
* Skip that mocha java you’ve been treating yourself with every morning.
* Set the thermostat a few degrees up or down to save on heating and cooling expenses.
* Keep the credit card in your wallet, or don’t even bring it along at along. This is not the time to be accumulating new debt.
* Try hard to pay off your old debt while you still can. Don’t waste your money on interest payments and late fees.
* Don’t tempt yourself at the mall. Stay away from stores where you just can’t help but buy a new outfit/pair of shoes/hat/trinket/book/CD/phone/etc.

If you try to trim just a bit out of every area where you spend money in your life, you might find you’ve cut quite a bit.

There are always choices we make in life about how we spend our money and the balance we choose to have make between living comfortably and saving cash. The two are not mutually exclusive, though. You can still have what you need, treat yourself now and again AND live within your means. It might require a different way of looking at things: a new perspective. You don’t need to completely deprive yourself of everything, but you do need to think about what is truly important.

Related posts:

1. To Invest in a Recession?
2. Interesting Ways to Save Money – Part 1
3. Saving Money for a Financial Emergency
4. No Recession for 2008?
5. Tips For Saving Money