Are we experiencing a recession?
That seems to be the question of the year. If you watch the news, you are probably convinced that you should just give up. Don’t start digging that bunker just yet. The truth is that the U.S. is merely growing at a slower rate. From January to March the economy grew at the same rate of 0.6 percent, as the last quarter of 2007. Slow, but still growing.
A recession is defined as a period of economic decline; specifically, a decline in GDP, for two or more consecutive quarters. Maybe we should wait until we have one quarter of shrinkage before we start saving canned goods. So to answer the question if we are indeed in a recession the answer is NO, but that doesn’t mean we aren’t on the brink of one.
How should we prepare?
The answer to this question is actually a very easy one, and that is you should manage your own economy at home first. Everyday we hear people complain about Government spending, yet 70% of us are living paycheck to paycheck. If we expect the Government to spend OUR money wisely, shouldn’t we do the same? If you had a financial plan that didn’t consist of putting that 60″ HDTV on credit, you could better position yourself in order to handle an economic down slide. Instead people are spending their own money UNWISELY while expecting the Government not to, so that it can subsidize poor decision making at home. Did you get all that?
By spending less than we make and saving for the future we can make a recession feel like a thunderstorm instead of a hurricane. If you didn’t have any debt payments, lived on a written budget, and had a savings of 3-6 months of expenses, would you worry about a “looming” recession? The only worrying you would be doing, is for the people who weren’t prepared. Not to worry though, just throw this book at them!!
What do we do if we have not prepared?
Number one would be to get started NOW! You are still going to have to hunker down for Hurricane Murphy but at least you will be more prepared for the next storm. Too bad you “needed” that 60″ toy! The good news is you can still sell that expensive T.V.! “SAY WHAT?” Well does the “looming” recession scare you or not? If you sold the T.V. you would be able to start your Total Money Makeover by saving $1,000 for your baby Emergency Fund and even have enough left over to pay on your smallest debt! How scared are you?
What if business has slowed, or we are unemployed?
If business is slow then you are probably going to have to get a second job, if you do not want to leave the first. Regardless, you are going to have to make more money! It might be a good time to ask yourself if you knew what you know now, would you still accept your current job? I’m not saying to quit your job but what if you set some goals and eventually worked your way out of your current low paying position? How nice would it be to be doing the job you loved? You would probably make more money doing something you loved and had a passion for.
If changing career paths is too much of a change then you must then consider your remaining options. A) You could look for a higher paying position in the same field, and/or B) get a second job delivering pizzas or waiting tables. When looking for a new job do not rely solely on the classifieds. In fact, you are far more likely to get a job if you thumb through the phone book for any businesses you are interested in, and placing a call. Of course you have to be prepared and ready to approach them in this way. For more about job search methods and choosing careers read 48 Days to the Work You Love.
For those that are unemployed, you need to be filling out applications every day. The Government is not going to find a job for you. Unless you are disabled you should have a job. The unemployment rate is around five percent but how much of that five percent choose not to work? Unemployment in Michigan is the highest in the country at around 7.2 percent, yet I know a very hard working woman in Michigan, that has two jobs despite this. She (Mikki) is doing a Total Money Makeover, and just like other Dave Ramsey fans, she is beginning to see the light at the end of the tunnel! I can guarantee you she is not complaining about unemployment rates?
YOU are responsible for YOU!
In closing I want to end with a line from the movie Pursuit of Happyness, where Will Smith is sharing a teachable moment with his son. “You gotta dream, you gotta protect it. People can’t do something themselves, they wanna tell you, you can’t do it. You want something? GO GET IT…Period!” You hear the man, GO GET IT! If you are unwilling to do all that is necessary to succeed, then you can’t complain about the inevitable outcome.