Dear Friends,

Since COVID impacted businesses and economies, we have all been expecting a large-scale recession. It is now speculated that we will witness one by late 2023 or early 2024.

However, this recession is unique - we know it’s coming. So, we can place ourselves in a position to be best prepared to absorb the hit in a better way.

How we can do that?

It is absolutely with Meticulous planning, some wise manoeuvres and a couple of responsible decisions can make all the difference during this troubled times!

Create Financial Buffers

It is possible that like other recessions, this one is marked with several pay cuts, layoffs or delayed payments. This is going to put strain on not only you but also your finances. That is why creating financial buffers is key.

One way to do that is to create what is called an emergency fund - 6 months' worth of money for ALL your expenses - including rent, food, bills, debt, investments, and other miscellaneous expenses incurred regularly.

Have Back-up Plans

Many people start looking for job opportunities during a recession only when they have already been laid off. Instead, try to refine your resume with your recent updates and achievements. Reach out to your network and develop conversations where they can inform you about upcoming job opportunities at their workplaces.

Additionally, this might also be a great time to upskill yourself. Most employers have called out a serious gap in the skillsets of current employees. This won't just help you make a case for your job security but also put you at the top of the picking chain when employers look to fill in open roles.

This might also be a great time to set up side gigs that support your income.

Dissolve the Debt

One must look at reducing the burden of debt before the recession hits. Pre-paying part or all of your loans would eliminate the added stress to your mind and your purse.

Additionally, if you are managing more than one form of debt, it is time you prioritise your debts in the order of most expensive to least and start paying them up in that order. Pay the expensive ones rather aggressively (more than just the EMIs) even if it means liquidating some extremely low-return investments.

However, do not panic and sell away your major savings for this purpose. The ideal approach still is to build plans that help you pay your debt fast without putting your savings in jeopardy.

Build a financial plan and stick to it

Investment markets are going to be extremely volatile. Some of your investments will crash during the period of the recession. Avoid rash decisions during this time. Remember the reason you made these investments, and do not liquidate them at the first sign of trouble.

Develop a long-term financial plan that accommodates your investments, expenses and goals and stick to it. If needed, reach out to qualified financial advisors for the same. A plan like this will generate a lot of returns in the future.

And the Final Check is

And the final important thing is that of course, it is utmost necessary to constantly review your financial situation and the condition of the markets that you have invested-in, but these steps become even more important during a recession.

It is only through steps like these that most people survive (and sometimes thrive) during and after