We all know how much the media is talking about inflation, every day, and in seemingly every story. Now, I know they report on what's going to get the most eyeballs, trust me bloggers need to do the same. Yet why is it that they are focusing so much on inflation and fears of a recession?
Well, it's because it affects pretty much everyone.
Most, if not all of us, buy groceries, gas, and household supplies. Even if you're like me and eschew driving as much as possible, gas prices will have an effect on you. as truckers pay for more diesel, delivery drivers pay more, and retailers have to pay their workers more, this translates into your body wash costing $8.99 when last it was probably $7.49. Not a huge deal, but you feel it.
Inflation is every harder for the lower-wage worker, someone who maybe works more than one job and has to drive instead of taking public transit.
Or maybe they have a landscaping company and have to drive a heavy truck and operate gas-powered equipment. People can't stop buying daily necessities just because they cost more, such as medicine, utilities, and laundry detergent.
Gold Coast = Need to have Gold to Survive?
I must say, being in California, we take the cake in terms of high gas prices. We get to pay around $6.80 a gallon as of this writing for a gallon! Now our state government is looking at ways to pay people to offset the high cost, and everyone with a microphone is complaining, even giving calling it "Biden Inflation". Inflation news is all the rage.
But guess what? The roads are still just as crowded, and people are admitting to not scaling back their driving. Some driving is necessary, sure, especially if you can't work from home.
However, take a look at the local mall, restaurants, parks, trails, and anything else recreation-related, and the parking lots are packed! What gives? Someone, please enlighten me.
Now because of inflation and gas prices becoming a fixture in everyday lives, people are wondering "Is a recession coming?" Well, why would one think that? Basic economics my friend. If things are costing more, people tend to scale back their spending.
Great Recession? Only if we Had a Crystal Ball
When this happens, companies start cutting back their spending, and then eventually laying people off. And what do people who are laid off do? Scale back their spending! So the cycle perpetuates into something bigger, bubble or not.
Whether there is a recession in 2022 or 2023, no one knows. One can only listen to the talking heads, who themselves are just going based on the data or notion they have.
What you can do though, is prepare. With this recession news coming on the heels of "The Great Resignation", many are still looking to jump ship while the odds are in the employee's favor. Even if you're not considering quitting, you might be at a risk for layoff. So what should you do?
1) Audit Your Spending - Sure when you're raking in $6,000 per month you don't feel the urge to monitor your credit card statements or be frugal about online shopping. However, that money may not last forever, and you don't want to be stuck with high credit card bills.
Especially with concerns around inflation and recession at the same time. Being out of work AND having your rent go up by $350 a month? Ouch. Look at where you would cut back if you had to go on unemployment or a lower-paying job.
Start winding down subscriptions and spending you can live without. Calculate your nonnegotiables like rent, food, and car payments, and determine how much you NEED per month, versus what you're currently spending.
2) Build Up Your Emergency Fund - If you've been living like there's no tomorrow and racking up debt, you might be in for a rude awakening.
When a recession shows up and puts you out of work, how are you going to pay the bills and keep a roof over your head? Don't tell me inflation is causing you to not have savings, especially if you're one of those people complaining about gas prices while filling up your 2021 Tacoma on your way to go the lake.
The more of a cushion you have, the more time you give yourself to find a suitable new job, pivot to a new career, or start your own business. This brings us to our next point.
3) Start Testing some Side Hustle Ideas - Most of you, my lovely readers, are familiar with a few of my side hustles (I like to call them extra income outlets, "hustles" just don't sit well right now). If you don't find you have time, fear not.
The housing market may slow down, but no one knows. Maybe you can rent an extra room, or your garage, or even your pool. You can also try working a fun job on the. weekends, like doing home staging, painting fences, or bartending. With sites like Upwork, Fiverr, and TaskRabbit, there are many easy ways to find something you like to do while padding your savings a bit.
4) Nurture Relationships with Stable Companies - Been ignoring those LinkedIn emails from Recruiters? You know who you are. Rather than ghosting because you're too cool to respond, try to politely decline but offer to stay in touch.
You never know when you might need them, or they can connect you to in their network. An economic recession hits various industries differently. If you work for a hotel, can your skills translate into an apartment community? If you work for a marketing agency, are there roles you can fit into within a school district or government agency?
Think about how your skills can transfer to a recession-proof industry, like healthcare, government, food, agriculture, or education.
So there you have it. Prepare yourself for the worst, and if it doesn't happen, you still win! You'll be in a much more stable financial position, whatever inflation or recession comes your way.
You might be able to help a friend out of work or take on business from a company that went under. Anticipating volatility and staying afloat when the tide gets rough takes planning, and you'll come out stronger on the other end with just a little preparation.