Business · October 22, 2022

How To Survive A Recession In Business

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Are you ready to fall? Boost your security, improve your job opportunities, work in a difficult environment, protect your retirement savings, and more: You need to protect your money now.

How To Survive A Recession In Business

How To Survive A Recession In Business

Eight months after the longest economic expansion in US history, concerns about its end are running high.

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The biggest threat is the rapid spread of the Coronavirus, which economists fear could lead to a global recession. Last week, the Organization for Economic Co-operation and Development cut its forecasts for many economies around the world, including the US, citing the risk of the spread of COVID-19 causing restrictions on travel, goods and services; decline in business and consumer confidence; and reduce production.

“The virus is wreaking havoc on a global economy already weakened by trade and political tensions,” said OECD economist Laurence Boone. “Governments must act quickly to end the epidemic, support health, protect people, reduce demand and provide support for families and businesses that have been most affected.”

Before you hit the panic button, here’s another important fact: No one knows when a recession will hit. For one thing, economists as a group are notorious for missing these calls (a study last year by the International Monetary Fund found that, of 153 recessions in 63 countries between 1992 and 2014, only five were predicted by the forecasts reviewed by the IMF). Major signs are also more mixed than recent headlines suggest. The unemployment rate, for example, just hit a 50-year low and, although growth is slowing, GDP is still rising and is expected to do so for the next year or so.

The only thing that is clear: After more than 10 years of an economy that continues to rise, a slowdown is a sure bet – and the time to prepare is now. Christine Benz, chief financial officer at Morningstar, an investment research firm, said: “Prices don’t go up to the sky.” “Sometimes you know that the economy has been doing well for a long time, so it makes sense to take steps to protect your money.”

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Carl E. Van Horn, who is the director of the John J. Heldrich Center for Workforce Development at Rutgers University said that it is like living in an area prone to hurricanes. “You know there’s going to be a storm and, if you’re smart, you don’t wait until two days later to get batteries, water and plywood,” he says. “You have to plan ahead.”

The Federal Reserve says that nearly 40 percent of families struggle to make ends meet for an unexpected $400 down payment, not to mention the larger expenses they’ll need to deal with after a layoff, reduced hours or other job loss. other financial problems that occur during the financial crisis. Meanwhile, a study by the American Institute for Economic Research shows that families in the lower half of the income bracket often have enough money instead of one or two weeks of money.

Even the wealthiest families are often without money. Among those earning $85,000 or more—the top 25 percent of income—the typical household has only 40 days worth of savings.

How To Survive A Recession In Business

It is a lofty goal. But don’t let the scary number put you off; in fact, any savings you make will help you. “Even a thousand dollars is better than no money at all,” says financial planner Stephanie McCullough, founder of Sofia Financial in Berwyn, Pennsylvania.

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To increase your chances of success, open a savings or money market account with a name like the “Oh S–t Fund,” McCullough says. This uses a financial principle called mental accounting: When you invest money for one purpose, you can’t spend it on other things.

Then, change the contribution by choosing the money that goes into the “fund” every time you get paid through direct debit (many companies allow you to split your payment between two or more accounts). Or set up a similar plan at your bank or lender or through a savings program like Qapital. The app also has a few pre-set rules that you can use to add a dollar or two to your account every time, say, you go to the gym or buy a latte.

McCullough compares it to fire drills. “You can think more calmly when you’re not in trouble,” he says. “You hope it’s not going to happen but if there’s a fire, you’ve tried the fire escape, you’ve checked the fire extinguishers, everyone knows the plans.”

Although most economists expect the next recession to be mild, you can get a good idea of ​​the trends that will appear in the labor market by looking back at the Great Recession, when unemployment doubled to 10 percent.

Resilience To Survive Investment Crash, Crisis Or Recession, Pushing Back Or Effort To Win Business Challenge, Economic Recession Concept, Businessman Pushing Falling Down Arrow With Full Effort. 6301924 Vector Art At Vecteezy

Young workers were severely beaten. From May 2008 to March 2011, nearly one in three people between the ages of 25 and 34 had a period of time out of work, compared to 17 percent of workers between the ages of 50 and 61, the Urban Institute analysis found. However, when older workers were laid off, it took a long time to find another job—often a year or more and often they had to be paid a fraction of their old wages.

One silver lining: An increase in unemployment is one of the last things in a recession, so you have plenty of time to find a job.

In addition to adding your title and recent titles, use an online tool like Jobscan to identify keywords that will help your resume stand out to hiring managers, says Maria Heidkamp, ​​director of the Heldrich Center’s New Start Career Network. More than 90 percent of major employers now use Applicant Tracking Systems, sometimes called resume robots, to identify applicants, often using keywords.

How To Survive A Recession In Business

Also make sure your LinkedIn profile includes a photo and a three-line summary. “Your resume is one of the first things HR people look at,” says Heidkamp. “You want to show that you belong here.”

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Additionally, you’ll want to include tangible, actionable items whenever possible, advises career coach Caroline Ceniza-Levine of SixFigureStart. He said: “In times of economic crisis, employers are very gun-shy. “They want proof that the new hire will pay off.”

If you need guidance, you can hire a resume writer or career coach who can teach you best practices or use them to create a new resume and LinkedIn profile for you. State and local governments and community colleges often offer free or low-cost aid and other services to job seekers.

Social media, with its regular updates on someone’s work date or new topic, provides a good reason to stay in touch. Always include a short, personal message and the reason why you are reaching out, so the recipient doesn’t think you have a different purpose. “We all know people you don’t hear about unless they’re in need,” says Ceniza-Levine. “Don’t be that person.”

If so, you may want to start your job search in earnest now. “You don’t want to be forced into a job when a lot of other people are being laid off,” says Ceniza-Levine. “It’s good to look when there’s still a labor market and people are being hired.”

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If a recession were to hit, what would be your biggest financial problem? Taking action to solve the problem now will make your life easier if problems do arise.

“What you hear is what you know best,” McCullough says. What’s your biggest concern—credit card debt, thinking you’re overspending?

Another option if you own your home and have a lot of cash is to pay off your credit cards with a mortgage. While it’s not ideal to pay off one loan by borrowing from another, the high interest rate difference — HELOCs recently averaged 6.05 percent, according to Bankrate — helps you pay off the loan faster and at a lower cost, assuming you put down the loan. the same amount to the house line each month as you have been paying on your credit card.

How To Survive A Recession In Business

How many advertising jobs do you need? Do you use a gym membership? Can you pass with one car instead of two? How about cutting down on restaurants and takeout? (A survey of more than 30,000 events by Common Sense, an economic research lab at Duke University, found that eating out is one of the things Americans worry about the most.)

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Bonus: Research shows that thinking about specific ways to cut costs often helps people cut back

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