Breaking news…Nigeria has once again gone into another recession, the second in 5 years! While the government might continue to blame the coronavirus pandemic as the major cause, there are several underlying factors that triggered it. However our focus today is not on the cause but on how to survive and prosper in a recession.
The Economic Times defines recession as a slowdown or a massive contraction in economic activities. A significant fall in spending generally leads to a recession. More so, the slowdown in economic activities may last for some quarters thereby completely hampering the growth of the economy.
Some salient characteristics of recessions includes but not limited to high amounts of anxiety and fear of the unknown plus loss of jobs and businesses. It is instructive to note that it is this same fear that causes consumers to cut back on spending and businesses to scale back investment, which most times slows the economy even further.
Be that as it may, it’s not all doom and gloom as there are certain things you can do to enable you survive and prosper in a recession.
1.Know the difference between needs and wants & reduce your expenses
This is important because many are yet to intrinsically differentiate between a need and a want. A need is something you can’t do without e.g. food, water, clothes, shelter, healthcare etc while a want is something that you can basically do without e.g. designer clothes, an expensive brand new car, vacation abroad, etc. During a recession, prioritize your needs over your wants via the usage of a budget. Delay unnecessary gratification no matter how tempting until the coast is clear. Living a frugal life has never killed anyone. If you decide to go on a spending binge, you might just be in the red and that would not be ideal for your financial base.
2. Seek more sources of income
Remember that phrase which says ‘’my take home pay cannot take me home”? It might sound funny but it’s true. Imagine what a person on minimum wage goes through during a recession? During recessions, lots of people lose their jobs and businesses slow down. At this point, it’s important to add another source to your day job or business and the best option is by joining a multi-level marketing (MLM) company like UGreat International .As a UGreat member, there are no overhead costs like office rent, local and state government taxes, staff salaries etc. You simply refer others and you earn. The more you do, the more you earn. You also have much needed time on your hands to get creative for more exploits. In MLM, you can determine how much you want to earn. This extra income can serve as a buffer against the drop in the inflows coming from your day job or business.
3. Increase your savings
It is often said that cash is king. Having handy cash to attend to challenges especially during a recession is vital and cannot be overemphasized. During recessions, it’s important to have a tidy sum set aside for the rainy day. For example, rather than totally spending your earnings from your job, business or MLM, you can set aside a certain percentage or tidy sum every month that will be kept in a special account. Ensure you do not make recourse to such monies. Constantly doing this overtime, sets you on the path to financial freedom and will enable you comfortably absorb the shocks of the recession.
Let us know how you’re pulling through by dropping your comments in the comments section.