You’d have to be pretty far removed from most chatter to get this far into 2023 without hearing about the possibility of an economic recession. But what is a recession, how does it impact the average person, and what can you do to decrease its impact personally? In this blog post, we’ll explore a few of the ways that you can protect yourself from a recession.
What Is A Recession?
According to the White House & the National Bureau of Economic Research (NBER), a recession is “a significant decline in economic activity that is spread across the economy and that lasts more than a few months.” In other words, it’s an economic slowdown that lasts a while and has a significant impact. Recession is a part of a healthy economy, but because individual recessions’ lengths vary, they can also be a pretty devastating financial time for plenty of people.
Some of the main drivers of a recession include some sort of sudden economic shock (think COVID-19), excessive debt & debt defaults, too much inflation or deflation, and major technological changes that cut jobs.
Although major financial names like Goldman Sachs claim that the chance of a recession in 2023 is closer to 35%, other financial experts and economists are predicting a recession toward the end of 2023. Others still predict that the recession will happen, but it will a shorter, less impactful recession. So what’s someone to believe if you’re not a financial and economic experts?
How Can A Recession Impact You?
Here’s another crazy statistic for you. USA Today reported that “Fifty-eight percent of the economists still say that there’s more than a 50% chance of a downturn in the next 12 months, according to a panel of 48 forecasters surveyed Feb. 3-10 by the National Association of Business Economics (NABE).” That means about 28 of the 48 economic experts surveyed are confident that a recession is on the way.
You can find statistics like that all over the place, and economists and those “in the know” are happy to warn the average person about the possibility of a recession.
To understand how this type of economic downturn can impact you, you have to recognize the most important effect of a recession: a rise in unemployment. Because people are bringing in less money, they’re also spending less money. This means that businesses grow at a slower pace or are shrinking, so there’s less work.
What Can You Do To Reduce The Impact Of A Recession?
In fact, recessions can impact people from any socioeconomic group, but even if they’re short-term, that doesn’t mean the average person can financially recover as quickly as the whole of the economy or those with a healthier economic safety net. If a recession hits, and you find yourself losing work or income as a result, there are some ways that will help you weather the recession and bounce back from it more quickly. This list can help you prepare for the recession as well as survive it once it happens.
- 1. Start saving everything you can now. Whether the recession hits and you’re impacted or not, you’ll be happy you gave yourself some cushion either way. If the recession does impact you, use your savings before using credit. Credit cards are high interest and will be seriously tough to catch up with and pay off later.
- 2. Review your budget and trim everything. If you don’t have a budget, get one made now so that you are fully aware of where your money is going. If you need to find ways to save money, a deep look at a realistic budget will help you figure out where to find ways to build your savings. If you do end up out of work or income due to a recession, talk to your financial institutions for help and ask if they offer any support programs or flexible payment options that can help you get through the recession.
- 3. If you’ve got any kind of investments, don’t panic and start selling them or changing things based on emotions like fear, panic, and insecurity. Things will turn around.
- 4. Look for side-jobs that you can do to pad your emergency fund. For example, while companies might not be hiring more full-time workers, they could be looking for contractors. Adding a career certificate in a field can open the doors to a side hustle that can prepare you for an economic downturn or help you work your way through it. Especially if you’ve got experience in Information Technology (IT) or programming, you could find work in places and quantities that you never anticipated before.
No one wants to think about having to face unemployment, but since around 40% of all adult Americans have been laid off in their lifetime, you can rest assured that there are ways to make it through. Start planning or training now to provide yourself and your family with the security you need to face the unknown.
Washington Technical Institute
Washington Technical Institute’s fully online certificates can be completed in a matter of months, with daily or bi-weekly start dates. Such flexible start dates make these programs unique and much more accessible for students like you. Most of our certificates can be earned as a self-paced program, meaning that you can work at your own pace to complete your courses, even finishing early if you have the time and motivation to do so. An additional benefit of WTI’s programs is that we offer affordable pricing and monthly payment options to help our students leave school without debt.
Although our goal is to help our students graduate their programs with little to no debt, we also recognize that some students might need financing options for their educational investment. We are excited to announce our partnerships with Meritize Financial Assistance, Climb Credit, or Ascent, student lending companies focused on financing career-building programs like ours.
If you’re ready to enroll and start working toward the personal and professional benefit of a career certificate program, you can register for your program online through our website. Still have questions about our programs? Feel free to call us at 800-371-5581 or text us at 952-465-3702 to speak with an admissions specialist.