How to beat the recession

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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