RECESSION
First South Africans received the shocking blow of being downgraded to junk status, then the fuel price increase was announced and NOW consumers are trying to make sense of a curse, yet crucial, word – recession.
Recent news about the technical recession is leaving some individuals feeling a bit topsy-turvy at this stage. Just to be clear, a technical recession is not yet a full-on recession. And while consumers may be pondering about the future financial implications of a recession on the country, DebtSafe highlights that consumers should rather stick to managing their own finances to avoid a personal financial slump.
But how can consumers ‘manage their finances’ effectively when many fear they won’t be able to handle the announced financial crunch? Consumers need to get their own mini-economy going rather than obsessing about the negative technical recession announcement. The recent changes in the economy have happened before and although it is out of their control, it is time to get a grip on their own situation. We also encourage consumers to put certain measures or techniques in place to manage their mini-economy and to be able to duck their own recession.
It’s All About The Attitude
Without a positive attitude, improving and stabilising your own finances may be quite difficult to accomplish. Negativity has never helped anyone. Economic hardship, like a technical recession, can change your mindset for the better and not in the way that you tend to think. As hard as it may sound, stop living above your means and get realistic about what you can and cannot afford. When you have a positive attitude with a realistic mindset, it can definitely be the slight push to kick-start your way to sunnier finances.
Plan What You Can Control
You are the captain of your own financial ship, so don’t let it sink. Planning makes things easier to control and that includes your own finances. When last have you taken a look at your finances? Scan through your bank statement and figure out where your spending leaks are. Take your budget template and indicate your short (birthday present), medium (car payments) and long term goals (retirement fund). Add a time frame and regularly check if you are on track with what you want to achieve.
Closely Manage Expenses
Keeping your financial management real can only happen if you keep your finances ‘close’. By being involved in every aspect of your finances and expenditures can help you to make better financial decisions. Keep track of your day-to-day expenses when buying groceries or when filling up the car, for example. Write every expense down or make use of a financial phone app. It may sound silly now, but when you compare your expenditures with the previous months, you will be able to see what you did better and what you can still improve in the coming months.
What Is Your Fiscal Policy
Perhaps you have never thought of your own policy regarding your finances. What about this one? Don’t overspend – your expenses should not be more that your income.
Creativity Leads to More Income
Keep your mini economy going by strutting your creativity and by creating extra income for yourself. You have friends and family members around you. What about a good brainstorming session to think about ways to generate some more bucks? You can do something at the farmers market or online. Start using that sewing machine that has been left in the closet for far too long or what about those interesting lamp designs that you drew years ago?
Save More and ‘Debt’ Less
If you are a good saver you are a good steward for the future economy. But if you do not get your debt out of the way first, you are less likely to save the way you want to. Get rid of your ‘smaller’ debt first and then tackle the ‘big guns’. As soon as you pay some debt off, put the same amount(s) into a savings account and get those saving bucks rolling in.
Don’t let the word recession disgruntle you. Yes, economic times are ever changing, but you can be proactive with your own mini economy and withstand the financial storm.