Personal Finance Management Basics: Best Recession Defense

Last January, this is what the BBC headline reads:

The feared recession in the US economy has already arrived, according to a report from Merrill Lynch.

It said that Friday's employment report, which sent shares tumbling worldwide, confirmed that the US is in the first month of a recession.

Six months after, these are the headlines:

US consumer confidence fell by more than expected in June, according to a key confidence survey.

The Conference Board's Consumer Confidence Index fell to 50.4, the lowest level since February 1992.

Confidence is down with the economy being hit by both a property slump and rising prices for food and fuel.

And

The US unemployment rate rose at its fastest pace in more than two decades in May, stoking fears of recession in the world's biggest economy.

The surprise jump in May's jobless rate to 5.5% from 5% is the most recent signal yet that US growth is stalling.

It shows US companies are more reluctant to hire as profits are squeezed by a consumer slowdown and soaring oil and raw material costs.

The US Labor Department said the economy lost 49,000 non-farm jobs. (BBC News)

Okey, enough of that. Given –life is more difficult now than ever, not only in US but for the rest of the world. Fuel crisis have reached the shores of those countries who thought that their economy is too vibrant to be affected by US recession and rising cost of fossil fuel.

Where this does leaves the ordinary working class and the small business owners?

To me, this calls for us to come to terms to these economic realities and get back to finance management basics. These basics are our best defense against this recession:

• Reduce costs and/or expenditures where and when applicable;
  
  
• Reinvent your income generation schemes by increase your income where and when possible. Find other means. Be creative. While keeping your day job and/or maintaining the core of your small business, look for other opportunities to increase your income. Remember how Chinese views or interpret the word ‘crisis’? Opportunity! Yeah, they always look at every crisis as opportunity to find something better from it;
  
  
• Redefine your lifestyle. The kind of lifestyle you project and live directly affects your expenditures. Make an inventory of those activities you think you can live without and remove them from your routine. Believe me; you will be surprised how much money and time you will be able to save there from;
  
  
• Re-channel your budgeting on the needs than the wants. The wants can always take a back seat;
  
  
• Recycle and reuse;
  
  
• Save, save, and save.