Is The UK In Recession? How To Survive And Manage Money During A Recession
You must have heard the grave news that is circulating all around the world: “The UK has fallen into a recession.” Having heard so much about it, you must be wondering by now if it is true or not.
Well, indeed, the UK’s economy has officially entered a recession just before the general elections. The figures derailed Prime Minister Rishi Sunak’s promise to generate economic growth.
The British households are expected to witness their first-ever drop in lavish living standards since World War II and between one national election.
Things are undoubtedly going to get tougher. But how about you learn the key to surviving and managing money like a pro during such difficult times? Yes, it is doable.
See how you can face this economic challenge head-on like a warrior.
6 Best Tips To Keep You Floating During The Recession
Have The Right Mindset
It can be deeply agonising if you are not yet an adult or not running a business already (no matter whether it is a lavish business or even a start-up business offering some service) during these times. In a state of panic, people tend to make panic-based decisions. Such decisions are irrational and can do us more harm than good.
Professional CV writers suggest if you are in a state of worry or fear, don’t make any life-altering decisions just yet. Rather, it would be more fitting to give yourself some time to get rid of that panic and stress. Once you are finally free, take it as your cue to start making your decisions. Ask yourself questions such as:
1. What is your financial status right now?
2. Do you happen to have an emergency fund?
3. Is your business headed for a crash, or is it thriving right now?
4. Is it on the brink of collapse?
5. Or has it already collapsed?
Such questions will help you adopt an appropriate mindset regarding your current situation. Get on your feet and decide to take the charge. The sooner you understand that you are the only person who can do anything about your finances, the sooner you will be able to make proper decisions.
Build An Emergency Fund
Do you have enough savings to keep you going if, God forbid, you lost your current job because of the recession? If you do, then caps off to you, mate! You are doing a great job. However, if you don’t have money put aside for rainy days, then it is never too late to start. Build an emergency fund that is equal to the four and six months of your basic outgoings.
You can keep your savings in an easy-access account so you can dip into it whenever you need it. During difficult times, these emergency funds can offer you a much-needed financial cushion. If you have a hard time saving your cash, luckily, there are many ways you can save. All you gotta do is search for the ones that suit you the best.
Reduce Your Outgoings
This ongoing recession in the UK is forcing a lot of British families to tighten up their belts. So, if you have not yet taken a quick glimpse at your finances, now is the perfect time to do so. Even your smallest spending habits, including your daily morning coffee that costs you £3.50, can add up to a lot if you keep spending it on a day-to-day basis. Jotting down your income and all your spending can help put things into the viewpoint, too. Moreover, you can also install a budgeting app to track your outgoings.
Avoid Making Impulsive Decisions
If you are used to making impulsive decisions, then you should know — making such hasty decisions, particularly about your finances, is never a smart move, and it is not recommended at all. However, during times of a recession, nothing can be worse than your impulsive decisions.
Thus, you have to think logically about your finances and avoid any bigger risks. Moreover, for now, it might be a good idea to delay your big financial decisions. Rather, focus on putting yourself in a good position to have room for movement when things get tougher.
Top Up Your Earnings
Having multiple sources of earnings can also help you protect yourself if one of them dries up. So, diversifying is always a smart choice. For instance, apart from your hectic 9 to 5 job, you can also work as a writer if you are good with words and can convince people through that. Never take your jobs for granted, especially during the times of the recession. If you head for the door during these times, then you might find yourself stuck in the middle because no other businesses would be hiring any new employees in the current situation.
Invest Wisely
It would come as a shock to you, but oddly, recessions do not always come bearing bad news. There are countless opportunities for those who are willing to invest $$$ in companies that have a history of being steadfast in the face of an economic decline.
Many recessions that happened throughout the globe over time have taught us one thing. I.e., investing in basic goods, such as utility stocks and prescription medications, hardly ever drops even during a recession. Therefore, the companies offering these items can prove to be a smart investment option. If you are planning to invest more generally, then make sure to invest for a longer period.
Is the UK economy really in recession?
Yes, Britain’s steady economy fell into a recession during the second half of 2023. This recession comes bearing bad news ahead of this year’s expected election for Prime Minister Rishi Sunak, who pledged to boost economic growth.
How will a recession affect people in the Great Britain?
Recessions mean lower wages, failed businesses, reduced opportunities, fewer jobs, etc. These economic declines do not happen year after year. However, they are not unusual.
Who suffers the most during a recession?
It would not be wrong to suggest that almost everyone suffers during a recession. However, the effects of the recession are felt more strongly by benefit recipients, those on fixed incomes, low-educational workers, and, of course, the youth.
Who benefits in a recession?
Recessions have a plethora of negative impacts; however, they also come bearing some good news. They offer a much-needed reset for the markets. Higher interest rates that often clash with the pre-mature stages of recession offer many perks to the saver. On the other hand, lower interest rates that coincide with the end of the recession offer advantages to homebuyers.
Summing It All Up!
That is it! One cannot deny that the UK is facing quite challenging times right before the general elections. However, if you move strategically during this economic decline, then this intimidating situation will not impact you more than it would have otherwise.
By incorporating the tips above in your day-to-day lives, you can do yourself a favour and save yourself from a lot of unspeakable problems that might arise as a result of the recession. Here is a speedy recap of what you need to do:
1. Have the right mindset
2. Build an emergency fund
3. Reduce your outgoings
4. Avoid making impulsive decisions
5. Top up your earnings
6. Invest wisely