Knowing what recession is will help us deal with it. Even our children should be aware of the situation, and everyone must pitch in and do their share if we are to reverse the downtrend in our economy.
The recession is one word we keep hearing about everywhere. People are talking about it constantly, and seriously considering the after-effects of this gloom and doom situation.
Financial definition of recession is when economic activities starts to decline over a period of at least 6 months. No, not 3 months now, then 3 months after a year. Recession happens when it continues month after month, without break.
For the regular guy on the street, it means that your regular paycheck is just not making it until the next paycheck – you’re falling short because prices are getting higher; your job is hanging precariously on a thin thread because the company’s sales are decreasing exponentially; or property you are buying or have bought are decreasing in value.
For the housewife, recession means that she will not be able to buy luxury goods or even the more quality, high end food products. Instead of shopping for daily needs in the local grocer, she goes to the market to stretch her money. There are less treats for the children, and even adjustments in holiday plans.
In the United States, a deep recession started being felt with the collapse of the subprime mortgage. Private economic activity dropped significantly, more than it has ever done in the past 2 decades. The effects was next to catastrophic and has a intense domino effect on the rest of the world.
Whether you are rich or poor does not matter, everyone is affected. What used to last for a week, will now last a few days. Everyone has to make adjustments in their lifestyles – if not because they have no choice, then because it would be ridiculous to start spending like there’s no tomorrow, hoping that it’s all a bad dream, and things will normalize in a few weeks.
When there is a recession, there is no miracle cure except if money comes down from heaven, or starts growing on trees. You have to buckle down to work, tighten your belts, and stop spending on non-essentials.
You should also stop using your credit card because you will be paying too high an interest, especially if it starts compounding. This happens when you don’t pay the full amount due, so you keep getting charged interest on whatever purchase you did not pay for completely.
Recession is not the end of the world. It’s not unmanageable. But it does requires more than what you were doing before. You need to live within your means, minimize credit purchases, buy on cash, and work better so your job does not get threatened.
You could also try looking for supplemental income if you do not want to change your lifestyle. Bottom line is that either way, there will be sacrifices to be made.
Living in a recession may be depressing, but you have to start thinking positive about life, and believe that things will get better for you, if you follow these three basic rules : work hard, buy on cash, and live within yours means.
If you have a family and a spouse, you could either start a double income by asking your spouse to look for part time work, or you could start a small business at home with your spouse handling the daily grind.
Remember, there is no shame in honest work.
If you go to www.wordnet.princeton.edu, you will learn more about recession.
Quote of the Day:
Recession: a widespread decline in the GDP [gross domestic product] and employment and trade lasting from six months to a year.
Recession is just a word that somehow manages to instill fear, doubt, and massive gossip. Buckle down and work hard and effectively, and you will manage quite well. Be creative, and look for additional sources of income to augment what you are now earning. It’s something you should be doing anyway, recession or no recession.