The global economy has been experiencing a period of sustained growth during the past few years. However, as unsustainable fiscal policies are beginning to phase out, experts are warning about the next financial crisis.
Indeed, forecast to hit the world in 2020, the next recession will hit the US hard. It’s the combination of increasing inflation and badly-timed policies and trade disputes that will lead to an inevitable drop in growth. However, unlike the last crisis in 2008, the current governments don’t have the policy tools at hand to prevent the downturn. If you are to believe the financial experts, now’s the best time to take preventive measures in your household to prepare yourself for the worst.
Failure to do so, unfortunately, can lead to tremendous debts in order to maintain your lifestyle. You can’t afford to ignore the warnings any longer. With a little over a year to get ready, it’s time to act.
Prepare your finances
Ask yourself: Can your finances sustain an unexpected hit? If the answer is negative, you have to walk away from the YOLO approach to develop a balanced and continuous budget. Going back to basics can show you the path to financial improvement, starting with keeping track of your expenses. Once you’ve drawn a budget, you can build up an emergency fund, transferring every month a fixed amount to your SOS saving account(s). As dull as it might sound, you can be sure that when the economy goes bust, you’ll be pleased to have something to rely on. It’s essential as well to monitor regular expenses and define not only their priority but also their purpose. Something as simple as buying a coffee on the go every morning can add up at the end of the month. Look out for frugal ways of saving ahead of the next crisis!
Buying local isn’t always in your best interest (but most of the time it is)
Admittedly, saving money doesn’t mean you should deprive yourself of everything you need. On the contrary, you can look out for cost-effective alternatives. For instance, if you need to change your car, it’s worth checking the prices in Canada. You can organize your car transport fairly easily between Canada and the US, but you could end up saving thousands of dollars in the process! However, for everyday purchases, sticking to your local shops is, by far, the cheaper option!
Look out for side hustles already
Saving can only get you so far. But building a profitable source of income with a side hustle can help you to make ends meet when the financial crisis hit the economy. If you’re an enthusiastic writer, for instance, you could earn between $500 to $3,000 a month, which can be all you need to protect your household from dramatic issues in the future. Platforms such as Fiverr, Craigslist of even ProBlogger are a fantastic starting point. If you are more comfortable with administrative tasks, offering your services as a virtual assistant for small business owners can be a life-changer!
From organizing your finances to looking out for solutions to make and save money every day, preparing for a crisis is no different to leading a money-savvy lifestyle. The 2020 crisis should serve as motivation to get your budget sorted once and for all.