Forget politics, recessions are part of economics.  In the United States, we have had as many as 47 recessions.

According to the National Bureau of Economic Research (NBER), an American private nonprofit research organization, a recession is “a significant decline in economic activity spread across the economy, lasting more than two quarters which is 6 months, normally visible in real gross domestic product (GDP), real income, employment, industrial production, and wholesale-retail sales”.  Its not a matter of IF we will have a recession but WHEN.  Are you ready?

Its not a matter of IF we will have a recession but WHEN.  Are you ready?  

If you lost your job, could you still pay your bills?  Do you know how much money you would need in savings to cover 1 month of expenses?

If you answered ‘no' to the questions above then its time to take inventory of your life.  Here's how:

1. Got to know where your money is going.

Its not enough to guesstimate how much you are spending on groceries, dining out, entertainment, car, home , utilities… you have to know exactly where your money is going.  No more excuses, start recording every spend.  Organize them by category per month.

2. Emergency Money… Got some?

Most Americans are literally a paycheck away from homelessness.  Don't be that person.  You deserve better!  Change your direct deposit to put 20% in a savings account and the rest in your checking.  This will do 2 things: 1. discipline yourself to live on less and 2. build that emergency fund.  Note to self, a vacation fund is NOT the same as an emergency fund!!

3. If disaster strikes be prepared to go into “one-ply” mode.

Bring the budget down to basics.  Eat at home, find free things to do with your friends, shop for necessities only, purchase 1-ply TP to remind you that its time to tighten the budget belt.

4. Got debt?  Get rid of it.

People ask me all the time, “Should I focus on paying off my debt or built my emergency fund?”  Its really a personal question.  But as a general rule, in the best circumstance, I would say to do both in parallel because the last thing you want to happen is be almost debt free only to have a big unforeseen expense come up and not be prepared for it.

Don't be afraid to make a list of all of your debts.  Don't wait until you “have a better paying job”.  Its not about the paycheck its about what you do with what you have.  I have read countless stories of school teachers retiring after 10 years and movie stars having million is debt.  Stop making excuses.  Take control of your life today.  You deserve the best in life.

When I started my journey of financial independence, I was about $130,000 in debt (not including mortgage).  It felt awful to look at that.  But acknowledging is half the battle.  Just by admitting to myself I was in financial hot water, I was able to take control and build a plan to get myself in a better place.  That was many years ago, today I have only mortgage debt and a solid emergency fund.  I also max out my 401k, ROTH and HSA accounts every year.  It wasn't easy but I did it… and if I can do it you can to!  I have faith in you!  You deserve it!

Grab your slice!

Pie Lady