Every year we talk about the importance of creating a financial plan and reviewing it at least once annually. While this year is no different - there is a big difference with the loom of a recession hitting. Consumers will notice the increase in living expenses (i.e., groceries and gas prices rise) and may even see a reduction in their hours at work. While we can’t control the things that come with a recession, we can control how we plan and react to the changes. Here are a few suggestions to reach your financial goals during a recession.
Cut Unnecessary Expenses - Believe it or not but entertainment is a luxury and if you are one of the 220.67 million subscribers to Nexflix® then cancel your subscription. In fact, cancel as many subscriptions as possible…we have YouTube for entertainment. There is a difference between what we need and what we want. You need food and shelter, you want entertainment. By cutting out the “extras'', it gives you the opportunity to save and feel more secure during these uncertain times.
Set Savings Goals & A Plan to Reach Them - Start by making some short term, realistic goals. If a realistic goal is to put $5 into savings each month, perfect - it is a great start. Maybe you can’t save because of debt but you want to save in the future. Create a plan for how you will pay off that debt and what you want to save in the future. Be S.M.A.R.T. with your goals.
Find It For Free - Why pay for it when people are giving it away for free? There are so many people trying to give away their stuff. Have you heard of the “Buy Nothing” group on Facebook? These are groups in your community that have stuff laying around their house and they are happy to give it away - FOR FREE! Use the internet as a tool to find the best deal but be aware of scams.
Track Your Progress to Stay Motivated - Remember, your financial plan is a marathon, not a sprint. It takes time to pay off debt and save money. Find a way to track your progress that gets you excited and be as specific as possible. For example, I love crossing things off my to-do list - so, an errand to the grocery store may include making the shopping list, driving to the store, only purchasing things on that list, and putting away my groceries. It is easier to stay motivated when you track your progress.
The best way to reach your goals is by making a few lifestyle changes at a time and not all at once. You are more likely to succeed if you start with a few small adjustments and work your way towards more difficult goals. When I wanted to recycle more, I started with plastic bottles and aluminum cans. Now, I recycle, compost, and even have an app on my phone to help. It was small adjustments that led to bigger changes over time. If you’re having trouble getting started or want some help, feel free to schedule a meeting with me using the button below.