We all entered into the New Year wanting to improve finances. But with everything that is happening around us, it seems like nobody will reach that goal. Every single news article says that we are already well on our way into a recession.
We are not surprised. Economic experts have been saying that it was high time for it to happen. So in a way, we should have been prepared for this for at least a year or so.
But what we didn’t expect was how bad this recession was going to be. And we are just seeing the start of it all.
At this point, it seems like the end of the financial crisis is very far. We have just begun and we have a long way to go before we can see the economy start to recover. So what can you do to motivate yourself to keep going? How you will make it until the end of all this?
Well, the best way to make it through until the end of all this is to always look forward. If the present situation is not giving you any reason to hope, look further into the future. Imagine a time when all of this is over. See a more improved financial position for yourself. If you can use the power of your mind, there is a higher chance that it will come to pass.
Considering everything that is happening right now, what do you have to lose?
But how should you see your future? The best way to do that is to think about what you should do after the recession.
4 tips to improve finances once the recession is over
Imagine that the recession is over. It seems hard to think about that considering everything that you are seeing right now. But if you want to maintain a positive attitude, you need to keep your eyes on what you want to happen once all of this is over.
When you focus on how you will improve finances for the future, you will find that your decisions right now will lead you to that scenario. Like if you want to save more money, your subconscious will influence your present decisions so you can save money.
Does that make sense?
If you believe that it can happen, you need to start thinking about what you need to do to improve finances after the recession is over.
Here are 4 things that you can do to make this happen.
Keep living a frugal lifestyle
During the recession, you are forced to live a frugal life. It is the only way that you can stretch your finances so it will last for a longer period. Otherwise, you will run out of funds. When that happens, you might be forced to rely on credit. If you want to improve finances once this is all over, you want to make sure that you can avoid debt at all costs.
But what about after the recession? Can you stop living a frugal life now?
No, you shouldn’t. You will be better off if you keep on living a frugal life. You want to make sure that you have a lot of extra money left over from your income. That extra money can also be used to help you make improvements to your finances.
A frugal lifestyle will also teach you to be more cautious about how you spend your money. That is a great habit to have in the long run.
Focus on eliminating debt
In case you were not able to avoid debt, that’s okay. Don’t stress over it because what’s important is that you have survived the ordeal. But what you have to do is to focus on making your debt situation better. Obviously, this means you have to pay it all off. And you need to do that as quickly as you can.
How? You need to look for a debt relief program that will make it easier to pay off your debts. This will depend on your financial situation. If you can afford your payments as usual, then opt for a debt consolidation loan. Usually, the Feds will lower the interest rate after the recession to help the economy recover. If you also have a good credit score, this will really work in your favor. You can save money on your debt payments.
But if you do not have enough finances to pay off your debt, you might want to opt for debt settlement. This option will allow you to reduce what you owe so you can afford your payments. You will negotiate with your creditors and lenders so they will allow you to pay only a portion of what you owe.
Boost your emergency fund
While you are paying off debts, you should also work on saving for another emergency fund. At this point, it is not surprising that your emergency fund is already depleted. This is why as soon as you have a chance to earn again, you should work hard to boost your emergency fund. This way, if something happens again, you will be okay. Even if another crisis hits you, there will be funds to help you survive. You have already replenished your emergency fund. You don’t have to resort to using debt to get through this recent crisis.
Of course, it will be difficult since you are also paying back your debts and spending on your daily needs. Even if you are living a frugal life, it will still be hard to pay your debts and save up for an emergency. But it’s okay if you can only contribute a small amount. What’s important is you immediately start working on boosting your emergency fund. Even if it’s one small contribution at a time.
Diversify your income
Finally, you also need to diversify your income. This is an indirect way to improve finances. By diversifying your income, you are opening more than one source of it. This will make your income secure.
Admittedly, this will be hard to do after the recession. According to reports, the coronavirus pandemic is expected to cause 14.4 million job losses. From the 4% unemployment rate in March, it is expected to reach 13% in June.
If you were one of the unlucky ones, don’t lose hope. Try not to panic because that will make it harder for you to have a clear mind. There are options that will help you earn money but you have to be creative about it.
In case you were not lucky to find a job during the recession, you might have better luck after. So you need to keep your eyes and ears open. Remember, the possibilities are endless as long as you are determined enough. Also, do not be ashamed to start from the bottom once more. What’s more important is to start working on earning more so you can improve finances.
How to keep your finances stable during the recession
To improve your finances faster, you might want to make sure that you don’t ruin it too much during the recession. This will be hard, that’s for sure. A survey revealed that 2 out of 3 respondents already feel the economic impact of the coronavirus pandemic. The respondents have expressed their concern because they don’t think that can pay their rent or mortgage.
If you are intent on protecting your finance during this time, there are two things that you can do. While these will not completely protect you, it will help minimize the damage to your finances. That way, you don’t have a lot to work on and recover.
Plan your expenses
Since you have limited finances, it is very important for you to plan your every expense. You have to make sure that you can buy a lot without spending too much of your funds. That is how you can help stretch your money. The longer it lasts, the less likely you have to use credit to pay for your basic needs.
Use credit as a last resort
Ideally, you want to avoid using credit because that will make it harder to improve finances. However, if you really have to, it should be your last resort. You should have exhausted other options. These include any government aid that you should have gotten if you lost your job. Or benefits that your employer has provided because of the pandemic. If all of these had been exhausted, then you can use credit. But make sure you use it sparingly.