Good Financial Planning Will Help Beat The Recession by:Denise Bergeron

Economics is not a complicated topic when viewed in a broad sense

. The economy can either do well or do poorly. When it does well, prosperity lasts for a while, but it almost always slows down and starts to do poorly again in the future. Then, it will swing back up again. Those times of economic slow down are called "recessions."

Recessions are inevitable, so it is only sound financial advice to tell you to plan ahead for them, even if you are currently experiencing a time of economic prosperity. If you are in a recession, there are steps you can take to keep it from impacting you too much.

The most dangerous thing that happens in a recession is job loss. As the economy slows down, people slow down their spending, and businesses suffer. This forces them to lay off workers, and those workers are the ones that suffer the most during a recession.

The best way to protect yourself from this possibility is to lay up some cash reserves. Economists recommend having three to six months worth of living expenses saved. This takes time, but you need to start working towards this goal in your financial planning.

Another danger of a recession is price increases. As companies try to make up for the lack of sales, they are often forced to raise prices. You can combat this by learning to cut coupons, shop sales, and stock up on your necessities when they are at a good price. Also, make sure you are only buying what you need. Save the "extras" for an occasional treat, but learn to tone down your spending habits. A recession is not the time to buy a lot of "extras."

Finally, whether the economy is good or bad, make sure you do not take on too much debt. Your non-mortgage debt should be as close to zero as possible. If possible, keep your monthly payments that are going towards debt, including your mortgage payment, around 30 percent of your total monthly income. Anything more than this is dangerous, particularly during a recession. Learn to live without using your credit cards, as this is one of the most expensive and dangerous forms of debt.

Financial planning through a recession is not as difficult as it might seem. Make sure you are saving your money, and limit your credit spending. Soon you will see the economy swing back toward the positive side, as it always does.

About the author

Get more Financial Help or advice about Financial Planning at http://www.singlemomfinancialhelp.com

http://www.articlecity.com/articles/business_and_finance/article_10301.shtml

POST COMMENT

Are You Recession Proof? by:Dr Sunny Obazu-Ojeagbease Time, Money And Good Health -Which Is More Important For Your Success In Business? by:Dr Sunny Obazu-Ojeagbease Obtaining Business Financing During an Economic Crisis by:Frank Joseph How to Increase IT Help Desk Customer Satisfaction and IT Help Desk Performance by:Howard Deutsch Increasing Office Efficiency, Where A Lot Of Little Improvements Really Add Up by:J. Michael Key Coping with Career Change by:John Mehrmann Are Lobsters Holding You Down? by:John Sparry Unsecured and Secured Debts by:Joseph Devine The Things That You Have To Consider In Buying a Time Clock by:Joseth Pauline Securing Positive Cash Flow Series, Part 1: Do You Have A Problem? by:Joshua Stearns To Enjoy Without Interruption Visit Anywhere Use Credit Cards by:Kristy Smith Obama's Mortgage Modification Plan - Coming to the Rescue by:Lindsy Emery What is the Difference Between Loan Modification and Refinancing? by:Lindsy Emery