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How to beat the recession

Guest post by: Roy Derrick

Article Overview: Is the current recession causing you to worry about your future? Do you worry that you will be made redundant? Are you sinking further into debt and looking for a positive way to clear your debt and create prosperity and more personal freedom for yourself? If so here are a few tips on how survive the current recession and some suggestions on how to clear your debt and create more job security.

How to beat the recession

Many economists continue to warn that we could be heading for a second recession. Although we may have just emerged from one of the worst downturns ever the conditions appear to be showing all the signs of a "double dip" recession. This means that the economy would recover very briefly then dip straight back down again.

Throughout history there have been times of great prosperity, growth and abundance but there have also been others of decline, suffering and extreme struggle like in the Great Depression. Globally like the seasons the economy also runs in cycles.

In today's modern language an economies downturn means higher inflation, soaring interest rates, high unemployment, markets losing value and not enough money to go around.

However in economics as in physics there is a well known law that states that "what goes up eventually must come down."

The truth is that money does not vanish it simply changes hands and we need to educate ourselves to understand why money changes hands and what factors influence the performance of the markets. What we need to do is to position ourselves in such a way as to acquire some of the money as it moves.

There are some simple steps that can be taken to protect ourselves during these difficult times merely by educating ourselves on how to save and invest our hard earned money wisely. At school we were not taught how to save or invest money wisely and as a result many of us enter into adult life by following the trail and getting into serious debt. What we now need to do is to educate ourselves on how to get out of debt. Here are some tips on how to reduce your debt:

Cut down on your current spending

Many of us could reduce our outgoings considerably merely by looking at cutting down on items that we are currently outlaying a lot on money on. One such commodity is gym membership. How many of us join gyms and after the initial enthusiasm hardly use them afterwards? It is still possible to stay healthy and fit by taking brisk walks or jogging which are free. You could also ensure that you walk short distances rather than making an unnecessary journey in the car.

Many of us could also save money by downgrading our television packages or by merely reducing how long we turn the heating on for. If we feel cold we could resort to putting on a jumper or snuggling underneath a cover which would still keep us warm but would save us a lot of money.

There is also a need to resume home cooking to save money and stay healthy at the same time. Processed supermarket meals are very convenient but are also very costly and often unhealthy. The same applies with snacks and meals offered in the workplace. A simple measure that can be taken to save money is to take your own snacks and drinks to work hence avoiding the temptation to purchase the more expensive alternative offered at the workplace.

It is important to rethink generally how we shop for groceries we need to ensure that we only buy the items that are on our shopping list and that we shop around for cheapest offers available for those products.

Pay off your debts

The best way to make use of any cash that you manage to save is to use it to pay off or reduce your debts. With interest rates being so low, paying off credit cards and loans which have high interest rates will be of greater benefit than saving. You also need to ensure that any remaining balances are on the best credit deals available especially as many credit card companies still offer interest free periods so that you can still trim further some of those outgoings. If you are fortunate enough to be benefitting from the current low mortgage interest rates you could also use the money being saved to pay off higher interest rate loans. Additionally you could consider paying a payment protection plan for your mortgage. Some of these schemes can be costly but can offer protection and peace of mind should you be unfortunate enough to be made unemployed.

Invest your money wisely

Saving in a bank or building society is no longer as secure as it used to be. Even well known banks are currently struggling to trade therefore caution is needed when using them to invest your money. It is therefore recommended to spread your money around and not to invest too much into one organisation. One good place to consider investing is the government savings and investment bonds as these accounts are backed by the government's own savings bank and do offer savers tax free options.

There are also different investment options available which currently offer more returns for your capital. For example you could look into the option of investing into gold or old coins.

Earn some extra money

One advantage with interest rates being so low is that there has never been a better time to start your own business. There are some excellent home based opportunities available. The main advantage that working from home offers is that the set up costs are low and you also save money and valuable time from not having to commute daily to work. Many on line business opportunities have educational and financial packages available that not only offer valuable training on how to set up your own business and create wealth but also educate you on how to best invest that wealth hence helping you to make even more wealth and creating more personal freedom. Be careful however before you commit to any company or business that you carry out thorough research to ensure that it is a genuine business opportunity that will work for you and help you prosper.

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Related Forum Posts
Re: Obama Wants Social Security for Illegals - [quote="Lucy Wu":2dlphfqu]I think America's biggest problem right now is clearly the recession, and that should be the main focus as of now.[/quote:2dlphfqu] I agree. Do you think President Elect Obama is doing or will do what is best in terms of beating this recession?
surviving an economic crisis - I'm moving to Idaho then I'm building a bunker and stockpiling 2 years worth of supplies. I'm buying a fishing rod, a hunting rifle and bunch of chickens to produce eggs... I like chickens because they don't care about recessions or depressions. OK... that may be Plan C - let's hope it doesn't get to that. So far, our business is doing well, we often target affluent markets and from our experience in the early 90's recession this worked well. BUT - what we're seeing this time around is not a simple recession. I think it could get bumpy. What type of businesses thrive in an economic downturn?
Re: Are Economic Recessions Good for Franchising? - All we can do is remain wide awake and pay attention to the ebb and flow. My strategy is to be prepared and go with the flow. There could be some rough times ahead... Interestingly, our business has remained strong. I believe it's because we're in such a tight little niche and we're well positioned to sign jobs nationwide, therefore we're not restricted to location. We also target affluent markets that have higher disposable incomes - this we do locally. Here are some Franchise Categories that could weather a good recession... Health and Personal Care Food services like Subway Debt Collection Tax Preparers & Advisors Any other recession proof franchise opps out there?
The Hidden Hand Effecting Your Bottom Line - If you are based outside the U.S and run an online business, you'll probably receive a lot of your payments in U.S dollars. When the recession hit I saw a lot of non-U.S business people boasting how they [u:20bfadx5]hadn't been effected by the recession[/u:20bfadx5], brushing off the recession as something that was not important. But they [u:20bfadx5]overlooked the hidden hand[/u:20bfadx5] effecting their profits. The currency markets which for non-U.S businesses paid in U.S dollars has masked the effect of the recession somewhat, and has an incredible effect on your overall profits. Looking at my profits over the past several months I can see fluctuations up and down. I may have a hard time attributing what is causing these fluctuations if I believed the recession didn't effect me because overall my earnings and traffic are up. But then I compare to the U.S - ££ exchange rate, and notice a [u:20bfadx5]strong correlation[/u:20bfadx5] with my profits. When the dollar is strong my profits are higher, and when it is weak they are weaker. It didn't account for all fluctuations but the effect was very strong. I know most people are aware that exchange rates effect their business, but I don't think people realize how strongly it's effects can be, and how closely related to the economy this is. So to say "the recession didn't effect me" because your profits went up can be [u:20bfadx5]very wrong[/u:20bfadx5]. The hidden hand of exchange rates could have improved your profits, and the exchange rates changed due to changes in the economy, i.e the recession. The recession has caused this fluctuation in exchange rate as people fled from the stock market into cash, and with the $$ being the biggest currency in the world, more people fled into the dollar, pushing up its value against other currencies. When the stock market bounced in March and people moved back into stocks and other investments, the dollar weakened. In addition I did see a overall drop in advertiser spend which wasn't just attributed to the dollar weakening after March. I attribute this to advertisers cutting back their budget in response to the economy, but given a change in mood and outlook in recent months this is now reversing and advertiser income is up despite a weaker dollar. So the recession has played a bigger role in my business than at first glance, so just because profits are up does not mean my business is not being thrown around by external economic factors. For this reason I've studied the economy, made a prediction on what is most likely to happen based on trusted sources with the strongest track record, and made a plan for that eventuality, and then also plans for less likely scenarios, so that my business can prosper in either situation. Instead of overlooking this hidden hand it is important to recognize it is there, and not accept it as a mystical force your business is a slave to, but something you can react to and plan for in order to take your business further.
Re: Matching competitors prices - beware - While I agree that getting into a price war should be avoided if possible... on rare occasions, it's not a bad idea to match someone's price (or even beat it) if you're doing it "one time" to land a new customer. For instance, I was recently looking for the best price on a [u:2rhwa2wg]specific[/u:2rhwa2wg] flight to NY and a customer service rep from Flight Centre ended up taking zero commission to help me book my flight. In fact, she even beat the price by $5 in the hopes of creating brand loyalty for the future.


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