In the midst of a recession, it’s easy to feel like things will never get better. The news is filled with reports of layoffs and stock market declines, the atmosphere at work is somber, and talk about the economy even makes its way into the TV shows you watch to get away from it all.
But instead of just sitting around and feeling miserable or doing nothing and hoping for the best, there are steps you can actively take to improve your financial situation during a recession, when money is tight, that will continue to help you in the long run, when things ease up.
Learn strategies for reducing your taxes
If your employment situation and your life situation are very simple, there probably isn’t much you can do in this area. However, once you get into things like home ownership, long-term relationships, and earning self-employment income or running your own business, tax planning can save you major cash. You may not be able to afford a fancy accountant, but you can probably afford to buy a book or two on the subject.
Develop better savings habits
When the money is rolling in, it can be possible to ignore your spending and still manage to save some money every month. Or you might be so convinced that you don’t need to worry about money that you’re spending way more than you should. Having less money, or just wanting to be more conservative, make it a good time to put yourself on an automated savings plan. Once you get in the habit of paying yourself first, chances are, you’ll stick with it, even when times improve.
Refresh your job search and interviewing skills
It’s easy to get comfortable at the same job and not seek out opportunities to move up or move into a position you’d enjoy more. Layoffs, or the prospect of layoffs, can give you the push you need to explore options you wouldn’t have otherwise. Don’t assume that a recession means you have to take a step down the ladder or take the first job you can get.
Become a more frugal shopper
It’s easy to ignore a buck here and fiver there when you have the luxury of extra cash. When you don’t, it makes sense to learn how to get everything you need for the lowest price possible. Once you acquire this skill, you won’t want to go back to wasting money, even when you have the extra cash again, and the savings will really add up.
Learn to enjoy leisure time without spending money
You already know that spending money doesn’t guarantee a good time, and that spending money and then not enjoying yourself is a lot worse than doing a free activity and not enjoying yourself. So start having friends over to watch your favorite TV show instead of going out for dinner. Take advantage of the many “free” community activities provided by your tax dollars, like the library, public swimming pools, bike paths, neighborhood parks, and summer concerts. (True, swimming requires a bathing suit and biking requires a bike, but most people already own these things.) Go to meetup.com and find some people in your area who share a similar interest or hobby (a free one) like hiking, political activism, or volunteering. Engage in the social activities offered by your church or synagogue.
Learn frugal skills
Take the time to learn skills like cooking, cleaning, home improvement, gardening, and lawn care. Instead of habitually paying restaurants to cook your lunches and dinners, a housekeeper to clean your house, a plumber to unclog your drain, and a landscape company to mow and edge your lawn, do it yourself–especially if you’re out of work and have extra time. You’ll save money and get some exercise.
Find ways to reduce your recurring monthly expenses
Health insurance, car insurance, homeowners insurance, phone service, the cable bill–all of your recurring expenses are worth looking at once a year to see if they can be lowered. Perhaps your car has become so old that you can drop your collision coverage. Maybe you’ve gotten married and can get on a spouse’s health insurance plan and drop your individual coverage. Maybe there’s a cheaper phone plan available, or one that closer fits your needs. Life situations change, and product pricing changes. A lot can change in a year to make your old plans less suitable for your needs.
Find creative ways to make extra money
Everyone has something they can do for extra cash outside of a regular job. It can be as small as collecting and selling scrap metal or redeeming soda cans for cash. It can be a little more involved, like selling your old stuff on eBay or having a garage sale. In a best-case scenario, it’s a side job that you can do for extra cash when you have the time–handyman work, babysiting, writing articles–the possibilities are endless. You just have to think about what skills you have and who you can market those skills to.
If you’re tired of hearing about nothing but bankruptcies, foreclosures, and layoffs, start finding ways to brighten the situation. By looking at hard economic times as an opportunity to make changes that will benefit your finances in the long term instead of allowing yourself to make excuses and wallow, you can turn a negative situation into a positive one.