We hear in the news often about the plaguing financial issues, the housing market, unemployment, and a recession. However, we rarely hear anyone discussing the tools to survive in a recession. Most people are trying to figure the answer to this question. How Can We Survive and Thrive in a Recession? I do not have all the answers but some suggestions that can help you from my experience. The key to solving a problem is finding the obstacles. You can and will survive in a recession. The key elements to surviving in a recession is to budget, let go of anything that you do not need (purge), purchase items that are needed (not wanted), become a savvy shopper, and keep cash on hand. I will continue to offer other suggestions in the upcoming weeks. These suggestions will entail finding ways to generate other sources of income, creating a strong savings plan, and to enjoy the pleasurable events or attributes of life. These are purely suggestions. These suggestions warrant no guarantees. These are strictly opinion based by the writer.
For the next few weeks, I will begin my “Money Series”. Today, I will discuss budgeting. In the upcoming weeks, I will discuss issues concerning money and personal remedies for surviving and thriving in a recession. Please review my suggestions. Please feel free to use what works for you and ignore any suggestions that may not work for your life. First, develop a budget. I suggest you figure out your monthly income, your expenses, and your spending habits. Develop a spread sheet and create a budget. I know… What is truly a budget? Well, for most people a budget is non-existent. We normally spend without any idea of how or what we are spending. The act of spending often leads us to money issues. Most of us, do not have a money issue but a spending issue.
We have to learn to allocate money and save. The ideal way to change your spending habits is to track your spending. It is hard to budget if you do not know what you are spending. I was told by an financial advisor to create a “spend journal”. A spend journal is a journal that documents your spending habits for thirty days. You will able to evaluate exactly the amount you spend on gas, food, dining, etc. After, you complete your spend journal examine your spending habits. After you examine your spending habits, then you allocate funds. First, write a list of fixed bills. Fixed bills are bills like your mortgage/rent, daycare, car payment/insurance, etc. Then, write a list of bills that are ever changing. These bills are gas for your car,dry cleaning, etc. Then, write a list of miscellaneous expenses per month like dining, shopping, entertainment, etc.
Then, create your budget. Go to mint.com, set up a budget using Excel, or get an account with PNC . PNC has a personal account that allows you to view your spending/savings habits via internet. This account will allow you to set up a budget, track exactly what you are spending and saving. Once you set up your budget, you can begin to get rid of or reduce your spending habits. For example, do you buy lunch everyday? If so, could you bring lunch instead of purchasing lunch. Let’s look at the situation. You buy lunch on an average of $8.00 a day about five times a week. This is $40.00 for the week and $160.00 for the month. During the year, you have spent $1920.00 eating lunch. Therefore, you can reduce your spending habit by purchasing groceries and preparing lunch. You can treat yourself to eating lunch out once a week at $8.00. You will save $128 for the month. Take the $128 savings from your old food allowance and create a bank account. At the end of the year, you will have $1536 from your old “lunch habit”. Creating a budget will help you reduce your spending habits. Imagine that you could eliminate two or three “spending habits” and save yourself $3000 or $4000 a year.
This is the one of the keys to surviving in a recession. The market, your job, and your income may not change but your cash flow can change with the decisions we make and changing our spending habits. Please think outside of the box. We have to began to change our habits because it affects our families and ultimately our community. One change leads to another change. Financial literacy is our key the future. So start today… Get a journal, document your spending habits, and create a budget. Change is constant and begins with you.
Natasha Jackson
Na-Klectic LLC.
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