Image via Pexels
Whether you're a seasoned professional in a lucrative field or just entering the job market for the first time in Princeton, news of a recession can be very worrying. In the first quarter of 2022, the U.S. economy shrank by 1.6%, and the Bureau of Economic Analysis predicts that the number could be similar in the second quarter. If true, that would mean the country is in a recession, which can come with job losses, rising interest rates, and other difficult financial circumstances.
The good news is recessions are an opportunity for many, and you can thrive with just a few tools at your disposal. In fact, you can flourish with budgeting, protecting your home with insurance, and making well-researched purchase decisions. By knowing that you can jump over the financial hurdles that come with a general economic downturn, you may be able to reduce the anxiety and depression that comes with money problems.
Manage a Household BudgetBudgeting is common advice given to U.S. households, but many families either aren't able to follow their plan or don't create one in the first place. This isn't much of a surprise, as budgeting can feel like tedious work, but it is important to be financially savvy during a recession. According to the U.S. Bureau of Labor Statistics, the average household spends 16% of their income on housing, 14% on transportation, and 11% on utilities and household expenses. You may not have a lot of flexibility in your housing or transportation expenses, but categories such as food, entertainment, and home repairs have a lot of wiggle room.
Invest in a Home WarrantyOne of the reasons it's difficult to stick to a household budget is unexpected large expenses. Homeowners' insurance often merely covers the cost of theft or damage to your house, but you can plan for major repairs that come out of the blue with a home warranty. As a type of service contract, home warranties cover repairs for some of your home's major components, such as air conditioning and heating, plumbing, refrigeration, stovetops, dishwashers, and washers and dryers. Instead of paying for a major repair bill out of pocket when something breaks, a home warranty helps you spread the expense through your normal monthly budget, which makes planning much easier. Note that your coverage will be largely based on which company has the best warranty for you.
Spend WiselyAnother important tool during a recession is your ability to make your purchases and investments last a long time. Whether you're buying a new air conditioner or a warranty for your entire home, read product reviews and check the ratings on multiple websites to ensure quality. This goes for refinancing your home in Princeton as well. More than half of online shoppers say they leave reviews for the products they buy at least once a month. That's an enormous source of valuable information for the major purchases you need. A wise purchase can save you money in the long run and help you avoid the stress of replacing a faulty product.
Don't Just Survive, ThriveEven if a recession lasts longer than two quarters, you can thrive by planning your finances, protecting your property with a home warranty, and doing your research before big purchasing decisions. Through DoughMain Financial Literacy Foundation’s financial literacy resources, you can succeed during an economic downturn.