Pinching Pennies: How to Save Money for a Recession
by Natasha Christou Digital Marketing ConsultantJust in case we hadn’t been through enough in 2020, the UK
is set to be hit with a recession the likes of which we’ve probably never seen
before. Experts have suggested that we’re likely to be the worst hit country in
Europe and the OECD (Organisation for Economic Co-operation and Development)
has predicted some daunting outcomes. Many of us are already feeling anxious
about our finances and as the economy is either set to contract
by 11.5 per cent after the first wave of the pandemic, or by 14 per cent if
the virus returns later in the year, it’s difficult to feel optimistic.
One reason why the UK is in particular trouble is our
reliance on the service sector — an important part of our economy that has been
hit hard during the Covid-19 pandemic. As it currently stands, the service
industry is beginning to get back on its feet, with many pubs and restaurants
set to reopen from the 4th
of July. After being in lockdown for so long, most of us are desperate to
get out again to enjoy a beer in a bar and catch up with friends and families
over a meal out (it’s been a while!) But with our personal finances to worry
about, how can we balance this return to reality with our need to budget in the
face of a financial nightmare?
Saving during a recession isn’t necessarily about ‘not
spending’ or ‘not doing things’, we’ve certainly had enough of that during
lockdown! Instead, it’s a great time to rethink our finances, live more
frugally, and figure out how we can enjoy ourselves while on a budget. With
around one
third of UK adults in full-time employment saying that they’re anxious
about their finances, there’s never been a better time to save some precious
pennies. Here are some top tips that will keep your wallet full and your
spirits high.
Diversify your income
As the old saying goes, “don’t put all of your eggs in one
basket”. We’re living through unpredictable times, and hardly any jobs or
industries feel 100 per cent safe at the moment. Saying this, no one expects
you to take on a whole new job! Instead, start thinking creatively about how
you could make a little extra outside of your nine-to-five.
If you live with a partner who works in a different field,
you’ve already started a diverse household income. But if you’re looking for
some extra ideas, why not start up a side hustle, consider selling some of your
own things on selling sites such as Depop, or pick up some freelance work every
now and again.
Eat out for less
We all want to play our parts in helping the service
industry get back on its feet — especially after being deprived of it for so
long! However, it can be difficult to scrape together money for a meal out at
the best of times, well, when you’re paying full price that is! Look out for restaurant discounts and
loyalty schemes to save some precious pennies.
Businesses will be keen to attract as many loyal customers
as possible after all of this, so there’s sure to be a multitude of deals and
discounts to snap up if you keep your eyes open!
Consider budgeting and downsizing
Instead of pinching pennies, think of it as ‘selective
spending’. You’ll still want to be able to enjoy yourself but making conscious
spending choices will save you some money where you least expect. For example,
consider trading in your car for a more fuel-efficient vehicle — even if this
seems like a big cost upfront, it will save you money in the long term. Downsizing
your house or flat is another option, as well as reconsidering your mobile plan
and those other monthly subscriptions that you might not be utilising as much
as you thought you would.
Build up your emergency pot
When preparing for a recession, saving an emergency fund is
key! If you feel financially secure at the moment, but you’re worried about the
future, there’s no time like the present to start setting a bit of money aside
each week or each month. Be logical about this, what percentage of your wage do
you feel like you could probably keep back? Even if it’s a small amount, make
it a regular practice to move some money into your emergency pot each time your
pay cheque comes in.
We’re certainly facing an era of uncertainty, and no one can
fully predict what the next few months and years may bring. If you think ahead
however, and start saving today, you’ll thank yourself later! Figure out the
perfect balance for you and watch how your money amounts while you’re still
able to do the things you enjoy!
Sources
https://www.mymoneycoach.ca/blog/money-saving-tips-how-to-survive-recession.html
https://www.ft.com/content/86767aac-98e0-4dae-8c5a-d3301b030703
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Created on Jul 9th 2020 09:52. Viewed 474 times.