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The key is in the way you spend and not in the amount of your income.
Saving in times of recession is not simple or easy. Many would think that it is practically impossible. But even if it’s just a few dollars, any money saved is a victory for the future. Therefore, we are going to tell you what you should and should not do to save the most money during an economic impasse like the current one.
What you should not do to Save Money
Let’s start with the actions you should avoid taking so that you can meet your savings goals.
Do not assume debts for large and unnecessary purchases
If you don’t take responsibility for your finances and a recession doesn’t motivate you to take care of your purchases, not only will you not be able to save but you will affect your pocket. The closer we get to the holiday season, the more careful you have to be of going into debt for large and unnecessary purchases.
Do not accumulate debts with high interest
If you have the need to get into debt for a particular emergency, find that it is not through a credit card or high-interest loan.
Speaking of credit cards, take advantage of those with introductory promotional interest periods or zero percent balance transfers.
Don’t be disappointed by low savings rates
When interest rates decline, they also affect the yield levels on any savings account. But let this not be a reason for demotivation, on the contrary, it should be an opportunity to start this process, even if the profits are minimal.
Don’t neglect long-term goals
It is just as important to save for an emergency fund, even if it does not increase, as well as always keep your retirement accounts in mind. Maybe not the best option for you, but during a recession, if you have $2 to save, send one to a short-term savings account and the other dollar to your “future self”.
What you must do to save
If you know how to solve the previous actions, you will be able to aspire to improve your way of saving by doing the following tips.
Review or adjust your savings goals
Bankrate notes that while saving may seem like an impossible task in the midst of a recession, especially if you or someone in your family is dealing with unemployment, it’s a habit you should try to maintain (or develop) even if the amounts contributed are small.. Take into account your current context to know what might work best for you.
Keep your savings accounts liquid
In times of financial distress, no matter how disciplined you are in the exercise of saving, it is important to put your money in savings accounts where you have easy access and without penalties for when you need to have them in your hand.
But having an account that gives you returns and is easy to access should not mean that you go bankrupt, but that you feel safe to continue adding money for yourself with the peace of mind that you can use your cash if you need it.
Reduce or negotiate the expenses you can
A subscription to streaming services isn’t as necessary as eating or paying your utility bills. Anything you can cut, do it. And for every dollar or penny saved, send it to your savings.
We know that each situation is different, but we are clear that if you carry out the above advice it is very possible that you can save as much money as the recession in the country allows you.