6 FINANCIAL HACKS – to reduce stress in a recession

In times of financial uncertainty, maintaining an understanding of your overall financial health is crucial. With the right preparations a recession can also be a time of great opportunities. Here are impactful financial hacks to help you and your family not only survive but thrive.

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◼️ Track your net worth in one place‌‌

One of the most effective ways to do this is by tracking your net worth consistently and comprehensively. Your net worth isn't just a number; it's a representation of your financial stability and progress. It's the sum of your assets - everything you own of value, such as property, investments, and savings - minus your liabilities - the debts and obligations you owe. However, keeping tabs on all these components can be a daunting task, especially when they're scattered across various accounts and institutions. This is why our first financial hack is to consolidate the tracking of your net worth in one place. By using a single platform or tool that gathers all this information, you can quickly get a snapshot of your financial state at any given moment. Not only does this save you time and effort, but it also minimizes the risk of missing out on key details that could impact your overall financial picture. This way, you can make more informed decisions, better prepare for potential financial downturns, and ultimately reduce stress in a recession.

◼️ Start a side hustle to earn extra income

In a challenging economic landscape, diversifying your income streams can provide additional financial security and even open up new opportunities. This brings us to our second financial hack: starting a side hustle. A side hustle is a venture that you take on in addition to your primary job, allowing you to earn extra income. This could be anything from freelance writing or graphic design, to teaching a musical instrument, or even selling handmade crafts online. The beauty of a side hustle is that it not only serves as a financial buffer during tough times, but it also allows you to pursue your passions and interests, potentially transforming them into profitable endeavors. It's important, however, to select a side hustle that aligns with your skills, interests, and schedule. Remember, a side hustle should ideally bring you joy and satisfaction, in addition to the extra income. Moreover, any income you generate from your side hustle can be directed towards paying off debts, increasing your savings, or investing for the future, further strengthening your financial resilience during a recession. By harnessing your talents and time effectively, you can boost your income and reduce financial stress.

◼️ Live within your means‌‌

The concept of living within your means is not new, yet it is often overlooked, leading to financial stress and anxiety, particularly during an economic downturn. Therefore, our third financial hack is to consciously practice living within your means. This involves ensuring that your income covers your expenses, without having to rely on credit or loans to make ends meet. It sounds simple enough, but it requires careful planning and disciplined spending habits. Start by creating a realistic budget that outlines your income and expenses, and most importantly, stick to it. This will help you understand where your money goes, identify non-essential expenses, and make necessary adjustments to align your spending with your income. Remember, living within your means doesn't mean depriving yourself of everything you enjoy. Instead, it's about making thoughtful decisions on how to allocate your money wisely, prioritizing needs over wants, and avoiding unnecessary debt. It might involve making some difficult choices, but the peace of mind and financial stability it provides, particularly during a recession, is well worth it. By making conscious spending decisions, you can maintain control over your finances, reduce stress, and build a solid foundation for financial well-being.

◼️ Negotiate bills and subscriptions to lower monthly costs‌‌

In challenging economic times, every dollar saved can make a significant difference. This leads us to our fourth financial hack: negotiating your bills and subscriptions to lower your monthly costs. Many people aren't aware that many service providers, from internet and cable companies to insurance providers, are often open to negotiation. If you feel you're paying too much, don't hesitate to pick up the phone and inquire about possible discounts or better deals. Be polite yet persistent, and don't be afraid to shop around if your current provider isn't willing to budge. Similarly, take a good look at your monthly subscriptions. Are you fully utilizing all the services for which you're paying? If not, consider canceling or downgrading to a cheaper plan. It's easy to forget about small recurring charges, but they can add up over time. Alternatively, if there are services you use frequently, see if there are annual plans available that are cheaper than paying month-by-month. By taking these steps, you can potentially save hundreds of dollars each year, lowering your monthly costs and reducing financial stress during a recession. Remember, the key is to be proactive in managing and reducing your expenses wherever possible.

◼️ Consider investing in stocks with long-term growth potential‌‌

While a recession might seem like a risky time to invest, it can actually present opportunities for those willing to take a long-term perspective. This brings us to our fifth financial hack: considering investments in stocks with long-term growth potential. It's important to note that investing always comes with risks, and it's crucial to do your due diligence before making any investment decisions. That said, during a downturn, many stocks may be undervalued, offering potential bargains for astute investors. Look for companies with strong fundamentals, a solid track record, and a clear plan for future growth. Additionally, consider diversifying your portfolio across different sectors and regions to spread the risk. Remember, investing in the stock market is not about making quick profits; it's about building wealth over time. Therefore, you should be prepared to keep your money invested for several years, allowing your investments to recover and grow despite short-term market fluctuations. By investing wisely, you can turn a challenging economic period into an opportunity for future financial growth, thus reducing stress and uncertainty. However, always consult with a financial advisor or do your own thorough research before investing your hard-earned money.

◼️ Build an emergency fund for unexpected expenses‌‌

One of the most effective ways to navigate financial uncertainties during a recession is by having a safety net in place. This is where our sixth financial hack comes in: building an emergency fund for unexpected expenses. An emergency fund is essentially a stash of money set aside to cover the financial surprises that life throws your way. These can range from unexpected medical bills, to sudden job loss, to essential home or car repairs. Your emergency fund should be able to cover a minimum of 6 months of living expenses. Having this financial buffer can provide peace of mind and prevent the need to take on high-interest debt in a pinch. Building an emergency fund might seem daunting, but even small, regular contributions can add up over time. Consider setting up an automatic monthly transfer to a dedicated savings account. If you're dealing with a tight budget, look for areas where you can cut back, or try to increase your income with a side hustle. While it's important to invest for the future, having money readily accessible in case of emergencies should be a top priority. This way, you can weather unexpected financial storms and reduce stress during a recession.

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◼️ TL;DR

• Track your net worth in one place: Consolidate your financial data for a quick snapshot of your financial health, aiding informed decisions.
• Start a side hustle to earn extra income: Diversify your income stream, leverage your talents, and boost your earnings.
• Live within your means: Create and adhere to a realistic budget, prioritize needs over wants, and avoid unnecessary debt.
• Negotiate bills and subscriptions: Lower your monthly costs by negotiating bills, canceling unused subscriptions, or switching to cheaper plans.
• Consider investing in stocks with long-term growth potential: Take advantage of market downturns to invest in undervalued stocks with strong fundamentals.
• Build an emergency fund for unexpected expenses: Set aside money to cover unexpected expenses, providing a financial safety net during tough times.

By incorporating these strategies, you can enhance your financial resilience, reduce stress, and navigate a recession more confidently... Building your OwnFoundations!