Recession: Are You Prepared?

Recession: Are You Prepared?

By: S. Michael Windsor

Oil prices have been surging. Housing markets have been dropping. Interest rates keep getting cut by the Fed in order to help curb the negative effects of possible recession. What happens if all of the current economic activity sends the US into an economic recession? Would you be prepared? Included in this article are several helpful tips and advice on ways to potentially avoid some of the pitfalls that occur as a result of a recession. But, as we all know, a recession is something that no one can ever be completely prepared for as it effects nearly everything that has anything to do with finance. That is, except for the few local towns that seem unaffected by the US economy, which is unusually rare.

Let’s say you are not an individual living in one of the local communities seemingly on a different route than the rest of the country such as the state of Idaho, which, in the government’s recent state-by-state GDP data, Idaho showed a 7.5% growth in GDP last year. How will you know when to be prepared? The answer is actually rather vague as no one can really predict precisely when and even if a recession will take place. In fact, many times we don’t even realize we are even in one until it has already set in. this uncertainty is exactly the reason why families and individuals should begin saving money today. Not a whole lot, but just enough money to get everyone through a good 6 months or so in case there should ever be any illness or job losses during these times, or any time in that matter.

Currently, in California one of the unions will be going on strike soon and everyone in the industry will soon be unable to work. What alternatives do they have, right? The suggestions I have heard right now in reference to those in need to financial advice are told: "make sure you have at least 6 months of money supply saved up." Ok. That would be great, but, they just realized they were going to strike a couple of days ago. Now what? Damage control. This could all be prevented if the unprepared ones put together some sort of recession plan leading with a nest-egg of savings just to help stay afloat. This is obviously one of the most important factors. But, what if you are so strapped that it is nearly impossible to save that much at this time?

There are several other things a person can do in order to prepare for a downturn in the economy or industry. One very useful thing to do is to always keep your resume fresh. You really never know when you will need it. Also, try to always keep an eye on the job market even when you are indeed employed. Just this knowledge alone will help you find a job for yourself if the need ever should arise. In addition, this information will be extremely helpful to those just entering the industry or friends who need a hand in finding a job. This will only help you in the future if and when you should ever need a big favor from them. I have seen this situation occur many times in my industry and it is quite amazing what a little help towards others will do for your career. If you are investing currently, maybe consider taking some of the funds out of the stock market and into something like bonds. The reason is that bonds have always performed much better than stocks during a recessions in the past. This can be attributed to the lower amount of funds being borrowed during a recession leading to lower interest rates. And with lower interest rates come higher bond prices.

As I mentioned earlier, predicting a recession has always been a hazy subject. No one really knows if and when one will actually hit. This is why we all need to prepare for such occurrences. These days it seems to be quite a challenge to keep everything stable for a long period of time and keeping the things in this article in mind when considering options will help prevent the need for damage control if the event should ever arise. If you decide to get into more investment tools such as bonds and annuities, make sure you know all of the facts involved before paying any money. Many cases show that you could be paying the company much more than you think when you have money in such tools as annuities. Always do your research and compare all the different plans. The salesmen know all about them, so why shouldn’t you if it is your money going into owning them? So, always know your facts when planning for the future and try to become even more prepared than you were the day before even if it just means knowing what jobs are out there and keeping in the ‘loop’. Planting seeds will always eventually result in a harvest. For more information on Preparing for Recession, please visit http://www.SquarePeak.com.

S. Michael Windsor is currently publisher and a writer for The Windsor Express Daily, which features daily exclusive articles based on improving the things which matter most in our daily lives. Visit us today at http://www.TheWindsorExpress.com and subscribe for free!

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