Try as we may, recessions and market cycles are simply out of anyone’s control. It happens when Canadian economic activity shrinks instead of grows and can lead to job losses, declining stock markets, and increased inflation.
It’s important to prepare yourself financially to help you stay afloat in tough economic times. Here are three tips that are within your control to help recession-proof your life – and give you peace of mind.
Big and small changes can save you money on your energy bill and help the planet at the same time. It’s a win-win – considering the earth doesn’t care if we’re in a recession or not! Here are a few ways to reduce your energy needs ASAP and make your future utility bills a little more affordable. You can save up to:
Recessions make the future more uncertain than ever, and knowing when things will get better is difficult. That’s why it’s essential to understand how much it costs for you to live to help you determine where you stand financially. You’ll want to ask yourself a few questions:
Next, you’ll want to look at how you spend today and anticipate your needs over the next six months to a year. Being well-prepared for a recession or job loss means having an emergency fund that covers three to six months of living expenses. If you don’t have the cash on hand, you can start by setting that as a financial goal. To achieve your goal, you’ll need to create a budget, which you can do by determining your total household income from all sources.
Next, list your monthly expenses – including your rent or mortgage payments, utilities, childcare, auto and home care, debt payments, and anything else you pay annually. Add everything up to see how much you’re making versus how much you’re spending each month. Be sure to also consider seasonal activities, birthday gifts, coffee and lunch money, and extracurricular activities for your kids if you have them.
Keep in mind that you may need to adjust your budget during a recession. Look at your non-essential spending to see if you can cut down on dinners out or entertainment subscription services because every little bit helps.
It’s hard enough in normal times to carry debt, let alone a recession. You might be worried about paying off outstanding debts, such as student loans or credit card bills. If you were to lose your job, there’s a possibility that you won’t be able to make your debt payments, which could impact your credit score. But your credit score is not the most important thing during a recession – staying financially afloat is.
You’ll want to take a look at your debts and prioritize them according to your lifestyle:
If you take the steps above but feel like you’re in way over your head, a Consumer Proposal is a great solution to consider. A Consumer Proposal is regulated by the Canadian Government and can only be submitted on your behalf by a Licensed Insolvency Trustee (LIT). It can reduce your debt by up to 80%, offering you a manageable monthly payment plan based on what you can actually afford, at 0% interest for the remaining debt.
For over 40 years, Farber Debt Solutions has helped Canadians find solutions to manage their debt, and we can help you too. Contact us today for a free consultation.
While none of us can predict how long a recession will last, taking the steps above will help you prepare for the worst. By understanding your financial situation, evaluating your career opportunities, prioritizing paying off debt, and adopting green practices, you can minimize the impact of an economic downturn on your personal and financial well-being.
If you’re feeling stressed or overwhelmed about your personal finances, contact us today. We’re here to listen and give you the tools to help you start feeling better about your money.
We offer a powerful debt-relief solution that can significantly reduce your debt without the drawbacks of declaring bankruptcy.
Book a free, confidential, no-obligation consultation and together, we can make a plan to help regain control of your money.
Although debt can be overwhelming, there are ways to start fresh and improve your relationship with money.