Introduction
Life was believed to be uncertain right from the beginning as people are believed to die anytime, lose their jobs at anytime, lose their finances at anytime, lose so many things at anytime but this uncertainty became visible when covid-19 came in 2019 December and became a pandemic in 2020. The economy shut down completely as governments of different countries called for a lockdown and instructed companies not to operate. The pandemic lockdown went down and the economy began to open and function gradually, it was at this point that the stock market of virtually all countries seemed to go to the top after the complete fall as a result of the lockdown. It then looked like the government bailouts was what companies used to buy back their shares and then this might look like a good way to stabilize the economy but the truth remains that it is artificial. So there is a possibility that there would be a post pandemic recession in a year or two after the vaccine has been completely administered. There is no doubt that the money that went into the stock market will come out back, companies are not yet stable and the number of unemployed people around the world has increased. The show this, a lot of countries around the world already announced a recession so there is a possibility of a covid-19 recession in the future.
Should incase this would happen, we all need to keep our finance safe. The bad part of a recession is that there will be little money in circulation. The GDP of several nations will drop and at this point it will be the work of the government to stabilize the economy and it will be the work of the citizens to sort out themselves. The government can only provide the basic amenities you need, they will not provide the basic necessity to survive. The government will provide road, but they won't give you the money to get a car or pay for your transportation to anywhere you are going to, the government would provide you with electricity but they will not be the one to pay the utility bills for you, the government would provide you with police for security but they will not pay to repair your spoilt door for your security purpose, the government would provide plans for farmers and so producers but they will not provide you the money to feed yourself and finally, the government would not determine how much you spend, keep your build your finance. It is left to you to do all of this. Since we are about to get into a foreseen recession which we do not know the date it would be depending on the country you are, I will be sharing a few tips to survive through it and even make better use of money.
Reduce Your Expenses
From what I wrote above, it should be clear that the government would not help with any of your personal expenses, which leave you with the responsibility of handling them by yourself. First, you need to understand that you have enough expenses on you once you are living alone, you have rent to pay, you have pay utility, buy grocery, and so on. This are necessities not forgetting that there are other expenses such as dinning out, travelling/touring, vacation in a 5-7 star hotel/resort, expensive cars and so on.
The pandemic actually affected the way some people spent money as their expenses reduced but there are other people (the vast majority) who did not change their spending habit, they just changed what they could spend money on like instead of going to the Cinema, they spent most of their money subscribing premium to as many movie and video platform as possible. People just started increasing their online spending.
In other to survive through a recession, what you have to do is spend less, spend as low as you can while increasing your financial balance. Never spend money as you see it, be sure to spend less than 60% if you have a lot of responsibility on you.
Do the Needful by Creating another Stream of Income and Leave the Needless
Some things matters and some things are irrelevant. If you intend to keep your finance on check and grow it as well, you need to focus on your personal finance. Some things are needful and somethings are needless. Plan for the important and leave the excusable, excused. You must be willing to grow your income so let your plans during a recession be focused on having a larger stream of income because the more the income stream, the more secured you are during a pandemic. If you are not secured, you could fall off.
Before the recession hits hard in your country there are so many excusable plan you should excuse, like celebrating a birthday, planning a house celebration and so on, rather you should increase your financial stream instead of depending on the current income you have. A lot of people will lose their jobs during a recession and when this happens they will be left with no job or any other source of income, so it is advisable that you start to improve on the needful and leave the needless.
Never Invest Beyond your your risk Tolerance
The fact that you have been advised to invest your money does not mean that you should put your money in an investment that will not pay off will is of high risk. Never go with the word "the higher the risk, the higher the return in a recession" because the high risky investment might be a knock away from bankruptcy.
Understand your tolerance level, work with your capacity, and do not let greed and/or FOMO. be sure to have investments that will not put you in emotional stress, be sure to invest wisely, never invest in things that are beyond your tolerance level.
Final Note
Be sure to improve your skill, and your educational level. It doesn't have to be a degree, you need to have a skill during a recession because the risk of being left without a job during a recession is lower with people who have skills or one higher educational level.
Another thing to put into consideration during a recession is emergency savings. Be sure to have an emergency savings that would keep you secured during a recession should incase there is a downtime and you are trying to find a foothold for your finance. Your finance is as important as every other aspect of your life so treat it as such.