The world has changed dramatically because of the effects of the recession. And you can attest to the fact that life hasn’t been so easy for most people.
Many people lost their jobs because some companies could not meet up with sales.
Which will keep cash inflow in the company to pay workers their salaries. However, there has been a change in that situation now.
There is currently a shortage of workers in the USA despite the spike in startups. And this represents a record 9.3 million job openings.
This is clear to the fact that many people started their own businesses; a way to survive a recession in 2022.
In this article, you’ll learn 7 Untapped Ways on How To Survive A Recession this year. I implore you to carefully read through.
What is An Economic Recession?
Economic recession is a domestic product (GDP) which is the amount a country produces and sells.
So when it declines for two or more consecutive financial quarters. They call it an economic recession.
In other words, an economic recession could also be when a country’s finances aren’t growing. Or when they are shrinking.
The National Bureau of Economic Research (NBER) measures and confirms recession. This bureau comprises economists.
They said that “A recession is a significant decline in economic activity spread across the economy, lasting more than a few months, normally visible in real GDP, actual income, employment, industrial production, and wholesale-retail sales. A recession begins just after the economy reaches a peak of activity and ends as the economy reaches its trough.”
Simply put, the recession is a period of general economic decline. A drop in the stock market typically accompanies this decline.
Besides that, there is also an increase in unemployment and a decline in the housing market.
What’s the best Way on How to Prepare for a Recession?
A recession requires a different path of action from you as an individual. This will help you stay through a hard time that it brings.
The best things to do in a recession include:
1. Live within your means
Experts recommend you should spend only 30 percent of your net income. That is earnings after taxes on discretionary items.
It’s cool to create a monthly budget to ensure that you’re living within your means. And not overspending your earnings.
2. Identify your risk tolerance
It’s a good idea to work with a financial advisor on identifying your risk profile. This includes identifying your risk tolerance.
Or the range of risk you can withstand. Besides that, your risk appetite or the amount of risk you’re willing to take on is also crucial.
Risk suitability is also another essential factor which is a component that’s based on when you plan on cashing out your investments.
If you’re going to change the strategy of your investment at all, let it be based on risk suitability.
3. Continue your education and build up skills
The unemployment rate during a recession for people with a bachelor’s degree or higher is much lower than for people with a high school education or less.
So, if you can’t really cope financially during a recession, it’d be nice to have some training and skills. Especially those that are going to be employable. It is a crucial move to make.
4. Pay down debt
It’s essential that you pay down any outstanding debt, specifically high-cost debt. Such as your credit card balance in order to create some breathing room in your budget.
Economic downturns can often lead to job loss as the coronavirus has shown. Paying off your obligations might bring you more peace of mind if you’re worried about job security.
You can prioritize credit card debt. Thereafter, they turn to other types of loans, such as mortgages or auto loans.
Besides that, you can consider student loans that have more favorable provisions. That makes paying them off less of an urgency.
If losing your job does not worry you in a downturn. It’s still a good financial habit. Because of the amount of debt that 13 percent of Americans owe, they could not save, according to a March 2019 Bankrate survey.
What Jobs Survive a Recession?
There are jobs that are recession-proof. You can take up any of these jobs during a recession.
Teachers educate students on a variety of subjects, such as; mathematics, language, art, and science.
They are also involved in elementary and secondary school. Teachers enjoy lasting job security because of the consistent need for education.
A slow economy cannot stop or push away the relevance of teachers in society. Children still need teachers to instruct, mentor, inspire them.
There are 3.6 million elementary and secondary school teachers currently employed in the US, according to the National Center for Education Statistics.
They expect this number to fluctuate as older teachers retire and the next generation graduates earn their licenses.
The Bureau of Labor Statistics expects a 3% growth in employment of elementary school teachers in the next decade. While 4% growth for high school teachers.
Funeral directors are in charge of all the activities involved with providing funeral services, including visitations and burials.
They usually own or manage their own businesses. At all times, funeral services are in high demand.
Besides that, the funeral industry provides a good number of stable job opportunities for people even during a recession.
There are currently 53,000 funeral directors working in the US, according to the BLS data. They include morticians and undertakers.
However, in the next ten years, they expect the overall employment of funeral directors to increase by 4%. And this is equal to the national average across all industries.
As a way of increasing their employment opportunities during the recession, many professionals choose to go back to school.
Even when the public is struggling, many colleges and universities see consistent enrollment.
College professors educate students either in a classroom or online. Besides that, they also hold master’s degrees and this dictates which subjects they are most qualified to teach.
The BLS says that there are over 1.35 million professors currently working in the US. And also say that the number will increase by 11% within the next decade.
The financial decisions and activities of a business or individual are usually handled by Accountants.
They know how to use specialized software and programs in creating budgets and producing financial reports. The time of financial problems is a time where Accountants’ services are relevant.
Most times, people hire accountants to help them file their taxes. Or even to help invest their income and spend their money wisely.
According to the BLS research, there are 1.4 million accountants and auditors working in the US. They expect this total to grow by around 6% in the next ten years. Better jobs prospects await accountants who hold certifications like the Certified Public Accountant.
One of the most secure job fields even during recessions is law enforcement. There is a greater need for experienced police officers and detectives by local communities during times of economic crisis.
Detectives have the professional skills to investigate crimes and arrest criminals. Before they become professionals, they’d complete several months of specialized education. And on-the-job training, however, the requirements vary by state.
The BLS data states that there are 808,700 police detectives employed in the US. And this number includes game wardens, patrol officers, and transit police.
They expect detective employment to increase by 5% by 2028. And this is on par with the national average across all industries.
Physical therapists have the knowledge of the human body and medical training to help patients improve their mobility and strength.
They render their services to patients who have suffered critical injuries and to children who are developmentally challenged.
Physical therapists are consistently in demand even during recessions. This is because they can relieve chronic pain and help people to regain their capacity to work.
The BLS data says that there are currently 247,700 physical therapists employed in the US.
They expect this number to increase by 22% before 2028. Just as the Baby Boomer generation ages and the need for PTs grows.
Psychologists know how to diagnose and treat mental health illnesses like anxiety, depression, and personality disorders.
During challenging times, psychologists are beneficial because they help people to care for their own well-being.
Besides that, they also help people to overcome personal roadblocks. Because of the importance of psychologists, many insurance companies cover psychiatric care.
Consequently, it encourages people to visit psychologists even when they are low on funds.
There are 118,700 psychologists employed in the US, according to the BLS. They also included school counselors and individual psychologists in this number.
They expect the overall employment of psychologists to grow by 14% by 2028 2028.
Treating and handling mental health problems has become more common in recent years. And there is now high demand for quality psychiatric services.
Pharmacists carry out the distributing over-the-counter and prescription medications to customers.
They most times work in pharmacies, hospitals, and drugstores. Because of the public’s consistent need for regular medications, Pharmacists enjoy job security. Insurance companies pay in part for many medications.
Therefore, most customers will continue to access the services of pharmacists even during recessions.
According to the BLS 314,300 pharmacists are currently working in the US. They expect the overall employment rate for pharmacists to remain the same over the next ten years.
Designing and producing software programs for private and public use is what technology development professionals do.
Software engineers create products that are designed for a variety of purposes which includes use for cell phones, tablets, etc.
Technology continues to advance and these tools are becoming more prevalent. Therefore, the need for skilled software engineers is also increasing.
The BLS estimate that there are currently 1.36 million software developers employed in the US. They also expect this number to grow by an impressive 21% before 2028.
Registered nurses provide quality nursing care to patients of all ages because of their training. They carry out tasks like conducting examinations, administering treatment, and distributing medication.
The public is always in need of this type of medical help and attention, so it is a stable career choice.
The BLS says that there are just over 3 million registered nurses currently working in the US. They expect this number to grow by 12% before 2028.
What to Invest in During a Recession?
Investment is something you should think of during a recession. There are some things you can invest during a recession like:
Buy Real Estate
In 2008, homeowners had a housing market collapse nightmare. But, it became a boon for some real estate investors.
When a recession strikes and home values drop. It could be a buying opportunity for investment properties.
However, if you can rent out a property to a reliable tenant. It will give you a steady stream of income while you ride out the recession. Thereafter, you can sell for a profit once the real estate values rise again.
Purchase precious metal
Precious metals, like gold or silver, do well during market slowdowns. But their prices usually go up during a recession because of high demand.
However, investment in precious metals can be done in a few different ways. The simplest route is buying coins or bars from a coin dealer or a seller.
It’s technically as good as any other option, notwithstanding it’s different from buying security.
Invest in yourself
Investing in yourself during a recession could be a great rebound for you. Especially if your job and income during a recession. Going back to school to gain additional skills or knowledge could help you get a better job.
What are 7 Untapped Ways to Prepare and Survive a Recession?
There is no doubt that recession has hit both individuals and businesses very hard. But there are ways to survive a recession.
However, you might not have considered trying them. But because of the unpredictability that comes with recession. It’d be nice to try out some of the following ways:
- Reduce your profit margin.
- Reduce the amount of inventory you’re holding.
- Maintain customer-relationship.
- Collect receivables sooner.
- Just lease it out or look for the second-hand.
- Reduce unnecessary expenses.
- Cut down your monthly rent.
The following are their explanations:
1. Reduce Your Profit Margin
In an economic recession, your customers most likely spend differently. As a business owner, bring down prices to drive more demand.
When doing so, ensure that you don’t undergo loss either. Keeping your business in great condition during the current economic condition is difficult.
But it is not impossible. You can do 100% better with this tip than what you would have been doing without during a recession.
2. Reduce the Amount of Inventory you’re Holding
This is one of the ways on how to survive a recession. It is recommended you do not tie up too much cash on inventory during an economic recession.
So, ask yourself if you really need to have 50 units of every product sitting on your shelves? Therefore, keep more cash in your pockets by having fewer stock units.
Liquidate the worst-selling products while you’re considering your inventory. You can talk it out with your vendor and sell it back to them.
It’s better to stock up more of best-selling products and less of worst-selling ones.
3. Maintain Customer-relationship
You can also prepare and survive a recession through having a good customer-relationship. Customer relationships are very important for every business. Always call, WhatsApp, or send a surprise gift or gift cards to your best customers.
Let them know you appreciate their loyalty and continued partnership in your business. Equally, let them know you’re willing to work with them to keep their businesses up and running.
If possible, sign a long-term contract if the opportunity arises! You can even buy them lunch or a cup of coffee to make them feel valued.
When you’ve met face-to-face and they know you care about them the most. They’ll find it harder to stop doing business with you.
4. Collect Receivables Sooner
Do not give free credit to your vendors during an economic recession. You’re not the richest man in the world.
But you can offer your customers a discount for paying sooner. Do not do this at the cost of your survival.
The recession might not give you the luxury of floating free credit to your customers any longer.
Collect your payments on time. You can send payment reminders to collect your pending payments from your customers.
5. Just lease it out or look for the second-hand
When you need a new computer or office furniture, you can lease out the one you have. Get cash from it and then opt for a second-hand if it’s in good condition.
By doing this, you can easily save a good amount of money. You might not need luxury things in this time of recession, so let go of luxury things.
6. Reduce unnecessary expenses
Luxury expenses in a time of recession aren’t the best idea. It’s not cool to waste money on things you don’t need during a recession.
Buying new things for office needs could be suspended for now. However, you can opt for a second-hand one instead.
Also, if you don’t have many clients coming in regularly to your office. You can consider moving to a location with a lower rent in a location that is decently priced. Moreso, you can opt to work remotely like many businesses are doing.
7. Cut down your monthly rent.
Another way on how to survive a recession is to cut down costs. You can negotiate with your landlord to lower your monthly rent. Prove your point to them it’s better for both of you if they lower your rent.
If possible, agree to sign a longer lease term. This is in exchange for the lower rent they’d agree to if you have to sign.
Naturally, your landlord would prefer you stay at a lower rent than have space vacant for months.
Economic recessions are tough. Remember that recession is a period of general economic decline. A drop in the stock market typically accompanies this decline. Nearly everyone suffers in the same way during an economic recession.
The unemployment rate rises, businesses, and individuals go bankrupt, wages go down, and so on.
It’s definitely an unpleasant situation that most people can’t say a good thing about. It’s likely that a global economic recession will continue in 2022.
Many businesses and economies around the world are yet to recover from the major blow of coronavirus. Because of this, top experts expect the damage to continue. Thankfully, you can prepare for an economic recession in the following ways:
- Live within your means.
- Identify ways to cut back on spending.
- Grow your emergency savings.
- Sell your unwanted stuff
- Pay down your debts.
- Take advantage of relief programs.
- Do not panic sell.
- Improve your education and skills.
- Supplement your income, etc.
Although many industries will suffer terribly. There are opportunities for you to start a business, invest, or gain employment in industries. Especially those that could remain unaffected by the economic recession in 2021 (and maybe beyond) as discussed earlier.
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