Get Rich Quick! I Don"t Think So.
It has been said that "A recession is when other people lose their jobs. A depression is when you lose your job."
Now that many countries around the world have been confirmed as being in a recession, the average consumer may be worrying how a recession might affect them and what they can do to insure against the negative effects of recession. Some of the effects of a recession and how to deal with them to your financial benefit follow..
More difficult to Borrow. In any recession banks are less willing to lend. This is a noticeable problem at the moment resulting from the so called "credit crunch" which is reducing the availability of loans.
Solution: It sounds obvious but avoid taking on any unnecessary debts. Try and reduce the debts you already have and consolidate these into a lower interest rate bearing account.
On the positive side, in this recession interest rates are slowly coming down and with still further falls to come this means lower interest payments for mortgage holders.
Unemployment. This of course is what concerns most people during a recession. As output falls so does that for labour in those sectors most affected by the recession. It would seem from the current situation that there are few if any recession proof jobs. Everyone from bankers, manufacturers and car workers are being affected. Even the retail trade is suffering big time.
Solution: If you fear unemployment, start thinking about what you might do as an alternative. Could you start up some form of business at home thereby creating a safety net? Maybe an online business, and I don't mean some crazy "get rich quick" scheme but a properly thought out business preferably where you can get help while you are setting it up.
The worst aspect of a recession is the effect on consumer confidence and people's fear about the future. Keep a calm and detached attitude and make up your mind that you will turn the current situation to your advantage.
Now that many countries around the world have been confirmed as being in a recession, the average consumer may be worrying how a recession might affect them and what they can do to insure against the negative effects of recession. Some of the effects of a recession and how to deal with them to your financial benefit follow..
More difficult to Borrow. In any recession banks are less willing to lend. This is a noticeable problem at the moment resulting from the so called "credit crunch" which is reducing the availability of loans.
Solution: It sounds obvious but avoid taking on any unnecessary debts. Try and reduce the debts you already have and consolidate these into a lower interest rate bearing account.
On the positive side, in this recession interest rates are slowly coming down and with still further falls to come this means lower interest payments for mortgage holders.
Unemployment. This of course is what concerns most people during a recession. As output falls so does that for labour in those sectors most affected by the recession. It would seem from the current situation that there are few if any recession proof jobs. Everyone from bankers, manufacturers and car workers are being affected. Even the retail trade is suffering big time.
Solution: If you fear unemployment, start thinking about what you might do as an alternative. Could you start up some form of business at home thereby creating a safety net? Maybe an online business, and I don't mean some crazy "get rich quick" scheme but a properly thought out business preferably where you can get help while you are setting it up.
The worst aspect of a recession is the effect on consumer confidence and people's fear about the future. Keep a calm and detached attitude and make up your mind that you will turn the current situation to your advantage.