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11 ways you can prepare for an economic slowdown and recession

Economic slowdown and Recession

Most of you would be fearful when you hear about the terms – recession or economy slowdown. Some of us might be nervous when we go into that phase. Some of us undergo stress and depression. The most common questions related to the same are below.

  1. What is Economic slowdown?
  2. How to survive a recession?
  3. How to become recession proof?
  4. How to prepare for a recession
  5. Recession – what to do next?
  6. Economic slowdown V/S Recession
  7. What’s the best thing to do in a recession?
Contents

Economic cycle

First and Foremost, always remember Recessions and Economic slowdowns are unavoidable. These occurs every now and then on a periodic basis. The primary point is that how well we are prepared for it. So, you should never panic and be depressed.

Our society runs with currency. Printed money goes into the market and keeps rotating like a cycle. The money flows with some pace. If the pace gets disturbed, there will be problems in economic cycles. You can go through this very much interesting video by Ray Dalio that perfectly explains about the economic cycle, economic slowdown and recessions.

 

Surviving your job

key areas of learning

You should identify your position in your team. How good you are in your job. Are you a valued person or a critical resource of your team? Just imagine will there be any impact to the ongoing projects if you don’t exist. If you are, then it’s good. If not, it’s high time that you start thinking how you can be a valuable asset in the team. Identify the critical and quickest learning areas where others are lacking and start working towards it.

Avoid conflicts

Always avoid conflicts with your team, other teams and managers. More than skill, it is your behaviour and attitude that play their part in bad times. Be genuine and honest with your manager.

Skill development

Continuous learning should always happen in IT for survival regardless of good or bad times. Try to identify the additional skills that really benefit and add-on to your current job. Courses and Certification would certainly help and strengthen your position.

Streching your scope of work

Identify the key areas of the scope of your work or check with manager if you can contribute on anything additional beyond your current job and if possible choose the work that can be easily recognizable and prove your worth to the management. This will definitely help to strengthen your position.

Finances

Emergency fund

Try to save 6 months of your salary as emergency fund. If not started yet, start doing it. It will help you a lot in emergency, and helps you to prepare for the economic slowdowns and recession.

Avoid unnecessary expenses

Avoid unnecessary expenses, debts and purchases. Start saving money. If possible procrastinate any expenses necessarily needed to later time.

Rent out assets

Try to look for renting or leasing any assets or properties as it can create a second source income for you.

Investment

If you have surplus amount that have been saved, invest in stocks, cryptos and/or mutual funds . The recession time is the best time and a very good opportunity for long-term or value investments. Please note this is not an investment advice. Just an general overview. you should consider your own due-diligence before investing

Prepare yourself

Set your mind

Set your mind and be prepared for the worst. Make your mind stronger and well prepared to lose job in case if happens. But at the same time, you should also understand that bad time never remains for too long. Hence, you should move on and hopefully positive cycle will start again in a matter of time. Situations keep change eventually

Backup plan

Think about the backup plan in case if situations turn bad. Calculate the budget estimates.

  • Basic Expenses: Calculate for basic expenses like food, fuel, utility and school fees for children (if any) per month and save for at least 6 months.
  • House Rent: Calculate rent for 6 months. Just keep in a mind if you can move to small house for rent or move to your parent’s or native house for temporary stay.
  • EMIs: There are mortgage payment protection insurers who can pay the mortgage while you are unemployed or check for options if your mortgage bank can hold your EMIs by paying minimum interest payments till you are employed.

Avoid stress

Avoid stress as much as possible. If possible, avoid too much access to News and Conversations with friends related to the situation. You will start feeling panic and will be disturbed. The situations happening around you doesn’t mean should always happen to you. Even if happens it will pass on. So be patient. Plan short trips and outing with family or friends during the recession times. Keep away from the world for some time. This will help to stabilize the mind and thoughts.

Summary

Economic slowdowns and Recessions cannot be avoided. Cycle repeats and moves on. So you should be prepared for any economic slowdown and recession if it ever happens and be patient. Plan early and if possible, utilize it as an opportunity to learn, invest and change your career. Hope this post helps you to understand about the situation of recession that affects you as an individual in a bigger perspective.

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