Recession Proof Your Finances
If you're new here, you may want to subscribe to my RSS feed. Thanks for visiting!
Sixty-one percent of the public believes the economy is now suffering through its first recession since 2001, according to a recent poll. Howard Dvorkin, CPA and founder of Consolidated Credit offers this advice to soften the blow and maybe help you come out of a recession looking like a winner.
• Pay down your credit cards.
• If you work with a company that has a staff of sales people talk with them. If sales are low and they are barely getting by then everyone’s job could be in jeopardy.
• Build an emergency fund. You should have up to six months of savings to take care of your living expenses.
• If you receive any checks or rebates from the government put that money in your emergency fund.
• Apply for unemployment benefits without hesitation if you are laid off from your job.
• If you have stocks and bonds talk with an expert to make certain that you are diversified. You should not panic and sell right away. Keep a close watch on the market and your investments.
• Don’t act hasty if the walls start crumbling around you. If you have to take money from your retirement plan, first understand the rules.
• If you can prove that you are experiencing financial hardship some 401(k) plans allow withdrawals — but you will still owe income tax on the withdrawal and, again if you are younger than 59 1/2, you will owe a 10 percent penalty.
• This may sound obvious, but don’t spend money because it makes you feel good.
• Start a new business. It’s a fact that many successful businesses were opened up during poor financial periods. If you have the right game plan and the money to do it, this may be the time to live out your life’s dream.
Ultimately, it’s important not to panic if you feel you are being financially stressed out. Work with your family to come up with new ideas on how to save money or make money and if you feel that your job is at risk don’t hesitate to start looking for new work. Call friends and old work partners; begin the networking process so you will have a new job lined up. Don’t wait for the other shoe to drop; strategize and make a commitment to adjust to anything the fluctuating market throws your way.
For more information, visit consolidatedcredit.org