The recession is a condition where there is a decline in gross domestic product in two consecutive quarters in one year. We need tips to do something to face recession. Recession is a weakening of the global economy and affects the domestic economy of countries around the world. The possibility of a country experiencing a recession will be stronger if the country’s economy is dependent on the global economy.
The risk caused by a recession can be a decrease in all economic activities such as corporate finance, employment, and investment at the same time.
Here are some tips for dealing with a recession in 2023, as reported by Bisnis.com:
Tips #1 Prepare yourself if one day you get laid off
The central bank will raise interest rates in order to maintain monetary stability. On the other hand, the increase in interest rates also affected the company’s financial resilience. So, the company laid off its employees as a last resort to defend against the threat of a recession.
If this happens, then people need to review resumes during their careers. Even at this moment it is an opportunity to update their personal data on LinkedIn. It also time to increase the provision of emergency fund income and seek career opportunities elsewhere.
Tips #2 Learn new things before recession
In the face of a recession we are also required to learn new skills. In order to allow you to get a new job that is much better for you. It good thing before recession happen.
Tips #3 Minimize expenses that are not too important
With the threat of a recession in 2023, it’s best if our habits to make expenses that are not too important are minimized or postponed for a while.
This like to apply the concept of frugal living by reducing expenses and determining financial priorities and prioritizing needs over wants.
However, even if applying this concept, one does not have to reduce his consumption to the extreme because it will create a recession.
“Frugality but don’t cut spending because it will cause a recession, just mindful spending. Don’t eat 3 times to 1 time. Not too much but not too short,” added Felcia.
Tips #4 Looking for additional income
You can start by taking advantage of your hobby to start a business and generate additional income. People can also sell online, given the increasing dominance of e-commerce. In addition, investment is also an option for the community.
The reason, said Felicia, in the midst of uncertainty, will also overshadow by the risk of Termination of Employment (PHK). So, that later it will make some people lose their main source of income.
“There is nothing to lose, we have many sources of income, so we stick with side hustle,” says Felicia.
Tips #5 Thick your emergency funds
The second tips, Felicia suggest that people start to thicken their emergency funds before recession. According to him, the amount of the emergency fund is adjust to the circumstances of each person by taking into account monthly income and expenses.
“Those who are still single may be different from those who are married. Add 50 to 100 percent of the normal amount. Or you can just put it in money market mutual funds or retail government securities, those are two anti-recession products,” as she says.
Tips #6 Pay your debt before recession
Lastly, taking into account the possibility that interest rates will continue to increase in the future. So, Felicia suggests paying off part of the debt that has high interest immediately before recession.
“I have a mortgage with an interest rate of 11 percent at the beginning of the year and maybe up to 14 or 15 percent in the future. Paying such high interest does hurt, especially since our investment returns are not necessarily that big. ” as she says.