It’s no secret that times are tough, with massive tech layoffs and a looming recession, it can get a little scary thinking about all the uncertainty. A recession can be a challenging time for many, especially those who have lost their jobs because of it, but it doesn’t have to mean financial ruin. Here are some tips on how to save money during a recession.
Cut Down on Unnecessary Expenses
The first thing you should do is take a good look at your expenses and cut down on any unnecessary ones. This might mean canceling subscriptions or memberships that you don’t really use, eating out less, or cutting back on your shopping. It’s essential to identify where you can cut costs and make those adjustments as soon as possible.
To help track my expenses I use Rocket Money’s free app. This tool helps me see all my bank accounts, credit cards, subscriptions and expenses in one place. It even sends me weekly recaps of how I spent that week and lets me know when there are subscription increases. I also like that if needed, you can cancel subscriptions right on the app.
Create a Budget
This will help you see exactly where your money is going each month and where you can make adjustments. Make sure to include all of your bills, as well as any discretionary spending you plan to do. Then, stick to your budget as closely as possible to make sure you’re not overspending.
Save Money on Groceries
One of the best ways to save money during a recession is to cut down on your grocery bill. You can do this by buying generic brands instead of name brands, using coupons, and planning your meals ahead of time. Make a grocery list and stick to it to avoid impulse buys that can add up quickly.
Consider Buying Used Items
When it comes to big purchases, consider buying used items or floor samples instead of new ones. This can include things like furniture, clothing, and even cars. Buying used can save you a lot of money, and you can often find items that are in excellent condition, especially if you look on Facebook Marketplace.
Find Ways to Make Extra Money
If you’re struggling to make ends meet, consider finding ways to make extra money. This could mean getting starting a blog or side hustle, selling digital products or items you no longer need, or even making Tiktok and YouTube videos. In a recession, every penny counts and even small amounts of extra income can help you stay afloat during tough times.
Pay Off Debt
If you have debt, it’s essential to pay it off as quickly as possible. This will help you save money on interest payments and free up more money each month. Consider using the debt snowball method, where you pay off your smallest debts first, and then use that extra money to pay off larger debts.
Use Cash Instead of Credit
Using cash instead of credit can help you avoid overspending and accruing more debt. When you use cash, you’re limited by the amount you have, which can help you stick to your budget. Consider using the envelope system, where you put cash in envelopes for different expenses, such as groceries, entertainment, and gas.
Cut Down on Utility Bills
Another way to save money is to cut down on your utility bills. This can include things like turning off lights when you leave a room, using a programmable thermostat, and taking shorter showers. Small adjustments like these can add up to big savings over time.
Build an Emergency Fund
Finally, it’s essential to build an emergency fund during a recession. This can help you stay afloat if you lose your job or have unexpected expenses. Try to save at least three to six months’ worth of expenses in an emergency fund.
Final Thoughts
Living through a recession can be tough, especially if you are already struggling to make ends meet. However, there are plenty of ways to save money during a recession that can help you come out on the other end. By following the tips above, you can manage your finances effectively and weather the economic storm. Remember to stay positive, stay focused, and keep your eyes on your long-term financial goals.
