You might have heard that the official GDP numbers that were just announced have put the United States in a technical recession. While the current recession isn’t ever quite like any other we’ve had, it doesn’t mean you shouldn’t stay on top of managing your finances and protecting your wallet. If you’re interested in seeing how you can help recession-proof your finances, as well as learning about some of the possible changes that might come with a recession, keep reading.
Increased Credit Card Costs
Unlike some previous recessions, the current one is also facing the highest inflation in forty years. To combat this, the Federal Reserve has been increasing the rate at which banks are able to borrow money. This means that all variable rate debt, like credit cards, will likely see large upticks as these rates continue to rise. This means the money you put on your credit card is costing you more each month than it did before. By focusing on paying down your credit card, you put yourself in a more financially sound position while eliminating the amount of money that’s going only to interest.
It can be important to pay above the minimum in order to get ahead of your debt, as well as being sure you don’t miss payments. While it might seem worthwhile to pay down all debt, any fixed-rate loans like most home and car purchases are actually costing you less as inflation and rates increase. Making sure those loans at least reach their minimum and focusing more on your variable debt can save you what feels like a fortune in the long run.
Unemployment Concerns
While many recessions feature job losses, we’re currently still seeing very low unemployment rates across the board. Many layoffs have been in the Tech industry, but otherwise many large employers have been looking elsewhere to make cuts. This may not last forever, with the average recession posting job losses of 3%. With fewer promotions and raises typically seen throughout a recession, now might be the time to talk to your boss and lock in any raises, talk about future career growth, and overall show your importance as an asset to the company.
With low unemployment, many places are also looking to hire even though we’re in a technical recession. If you can manage to find a higher paying job, it can help drastically with weathering the other increased costs that come with recessions. It may be harder to keep or maintain an emergency fund, but it’s more important than ever when things start to look bad. Bachelor’s Degrees typically offer careers that are more recession proof than those with only a high school diploma, meaning it might be the right time to try to get certifications or other education opportunities that your employer might provide.
These are only two of many ways that a recession might have an impact on your life. Whether it’s through increased loan costs, job loss, or prices rising across the board – all can have a major impact on your wallet. At Financial Resource Helper, we work to make sure that you’re updated on ways that you can protect your wallet, find unclaimed funds, find grants, and save on costs. Be sure to check in for more content that could help you.
