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Do you have a family budget?
If you're struggling to make ends meet, you'll want to check out our contributed post today. It just might keep you out of further debt.
The economy experiences a recession when commodity prices increase while consumer spending plummets.
This occurs because the average consumer struggles to make basic purchases as the price of goods and services increases dramatically.
This can be a tough time for families that have to deal with multiple expenses like mortgages, car payments, education expenses and so on.
However, things don’t have to be all doom and gloom for you and your family during a recession.
Below we share with you 10 steps that you can take to deal with the recession and come out relatively unscathed with a family budget.
Diligent budgeting is one of the key steps that you can take to protect your family from the worst effects of a recession.
This involves taking stock of your monthly income and planning your expenses so that you’re able to spend less than you earn each month.
Related: Pay Off Debt And Save Money In 2019
During a recession, it’s very important to cut down on your spending and only purchase goods and services that you absolutely need.
Also, make sure to avoid superfluous spending by any and all means.
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Carpooling or downsizing from multiple cars to one is another great way to cut down on expenses during a recession.
You’ll end up saving on fuel expenses, car maintenance, auto insurance etc.
If you’re thinking of taking out a loan because your current income is not enough to cover your expenses, give it a try!
However, be careful because amassing debt during a recession is never a good idea as it will only add to your financial troubles, not solve them.
It’s also important to continue saving on a regular basis despite a reduction in income and the ever decreasing rates offered by banks during recession.
Staying strict with your savings will give you something to fall back on when unexpected events occur that require more than your monthly income.
Also, your savings will help prevent you from taking out a loan or using your credit card for unexpected expenses such as fixing broken appliances or paying for visits to the doctor.
Related: 31 Life Hacks to Save Money Quickly
Instead of eating out or buying take-out, cook at home and eat-in instead.
Not only will you and your family enjoy the experience of creating memories around your family home’s dinner table together but you’ll save a ton of money as well.
In fact, research shows that you can spend twice as much money on the same meal that you prepare at home when you purchase it from a restaurant.
Now, this doesn’t necessarily mean that you should stop eating out altogether, as it may be difficult to go cold turkey like that.
Rather, you should start by reducing the frequency with which you eat out every week and start saving the money that you would’ve spent on restaurant meals in order to boost your resolve.
You might want to get a side gig or work multiple jobs in order to ensure the financial security and comfort of your home during a recession.
Sure, you might have to sacrifice a few things like your sleep and social life, but it’s worth it if you want your family to remain at ease during this difficult time.
Taking a vacation during a recession is an extra expense that you simply don’t need, especially if you’re traveling as a family.
Needless to say, this shouldn't even be a line item in the family budget for now. It’s probably best to avoid long trips during a recession and find interesting things to do nearby or even at home.
For example, you could watch movies and make special homemade “movie snacks”, or camp outside in your backyard to watch the stars and roast marshmallows while you share folk tales around a fire.
These experiences may prove to be even more valuable and better at connecting you to one another than a fancy vacation that will only have you stressing out due to its financial ramifications.
Your children will still want the gifts and the trips you promised them before the recession hit.
So, you’ll have to sit them down and have a talk about some of the changes that they should expect due to the economic downturn.
It’s important to continue making your insurance payments even if the premiums increase because it will come in handy when you have medical bills to pay.
This includes things like medical insurance, disability, life, auto, and homeowners insurance.
Plus, if something happens to your car or your house, you won’t have to pay out of pocket for it if you have insurance coverage.
Further, disability insurance will support you when recovering from a physical injury.
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