Due to the increasing concerns over COVID-19, experts say that we might be heading towards a recession. Before we get into what you can and cannot control, let’s briefly go over what a recession is.
A recession is described as a decline in the economy. I know the term “recession” sounds scary, but it means that the economy is no longer growing.
We won’t get into how it affects Wall Street or the White House because you are probably seeing it yourself by watching the news and noticing the stock market slowly crashing, but we will get into what you can do to be prepared for this decline or a future one.
Your Savings Account
Keeping your money in your savings account and having that money as an emergency fund is not a bad idea. People are getting paranoid and withdrawing their money because they think they will lose it all. Remember that most banks have you covered for up to 250k.
Your Checking Account
Same thing we mentioned above. People are freaking out and withdrawing their money from their banks. It’s always a good idea to have cash at hand, but leaving your bank accounts empty is not the smartest move.
People are selling their stocks in fear of losing everything, but they are disregarding the fact that the stock market itself is a rollercoaster that has its ups and downs. Stocks won’t remain low forever. Stop selling out of fear.
Read how to get rid of debt with the snowball method here.
A recession does not mean you can forget about your debt because you have other things to worry about. In case of a recession, maybe it is best for you to sell whatever you are not using and pay off your debt all at once so that you can have peace of mind.
Perhaps you could start by selling technology or that expensive car of yours so that you can use that money to pay off your debt.
In order for you to stay on top of your finances and see a clear picture of where you were, where you are, and where you could be heading, I recommend you check out Status Money. Status Money is a 100% free money management website where you will see everything you need to know about your financial status such as your debt, net worth, it recommends credit cards you should consider to pay off your debt without interest, shows you the steps you should consider to improve your financial situation, and much more.
You will also get a $5 bonus when you sign up and complete your profile. They also give you more free money for completing their recommended tasks such as opening a savings account. I like free money, and my guess is that you do, too.
Here’s a little snapshot of how the dashboard looks like:
Important note about recession: a recession is declared afterthe economy has been in a slump for six consecutive months. At the time of this writing, we are in times of uncertainty and do not know what the future holds. This situation can be avoidable once we get to contain COVID-19 and take care of Americans correctly.
It is also crucial for you to be aware of the things you can and cannot control.
Although you can’t control the country’s economy, you can control how you perceive it and how much you can learn about it. This is why you should never stop learning and you must definitely become financially literate because you cannot afford to freak out.
What matters the most is your household being financially stable and stocked up with the essentials such as food, medicine, and toiletry.
As always, stay calm, and leave your thoughts below.