On Surviving A Personal Financial Crisis - And Other Personal Finance Subjects Like Loans, Credit, Debt, Debt Management, And Saving Money

Preparing for a recession, and surviving a recession for that matter, is all about doing more with less. During good economic times we tend to not look at our personal finances as closely as maybe we should. During good economic times we tend to over look the little increases in our fixed expenses. But, during bad economic times like recessions we also tend to look over some pretty obvious candidates for cost cutting. Or for that matter, we tend to over look places where we can save money. The following are 10 recession tips that I may help you to come up with some other ideas for saving money with banking and other personal finances.

Recession Tips For Saving Money Banking

Recession Tip 1: Deposit your money you want to save in a savings account at a bank that offers higher than normal interest rates. Most of the time banks that offer the highest interest rates, are banks that are based primarily on the internet. Because they are primarily located on the internet they they don’t have brick and mortar offices and so they have lower expenses. Many people have shied away from internet banks. People are just used to being able to walk into a bank office. It makes them feel a bit more secure. Times are changing and more and more people are getting used to the idea of having both their savings and checking accounts with Internet banks. These banks are really no different than any other bank. As long as the internet bank you choose for your savings account is insured by the Federal Deposit Insurance Corporation (FDIC) then you money is safe. That is your savings and checking accounts are safe up to $250,000.

Recession Tip 2: Some banks make huge profits on the fees they charge. The banking business is getting more and more competitive. If your bank charges you fees dispute them or ask them to refund your money. You should not have to pay fees to whether on your savings account or on your checking account. There is simply too much competition out there for your banking business for you to ever pay fees.

Recession Tip 3: Almost all banks have online bill pay. If your bank doesn’t then it may be a good time to think about transferring your savings account and your checking account to a bank that does. Online bill pay is great for a few reasons. First with online bill pay you can schedule your payments. If you are like me and wait to the very last minute to write the check and mail it, having scheduled online bill pay could save you a lot of money in late fees. Online bill bay, especially if you schedule the payments, can save you a ton of time. Time is money. So the more time you save the more money you save.

Recession Tip 4: Save money by tracking your expenses. Once you know exactly where you spend your money it won’t be difficult to where you can cut your expenses to save money. Most banks today allow internet access to track the activity on both your savings and checking accounts. Take advantage of this fantastic accounting function. Use the debit card that your bank gives you to track every single purchase that you make. At the end of the month down load a transaction file and upload it to a personal accounting software like Quicken. ( Note: I highly recommend using Quicken. They are the market leader, and have been for a long time, in personal accounting software. I don’t know of any bank that does not allow you to down load your debit card transactions in a format that is ready for Quicken. Besides Quicken’s strong bank affiliatations it produces fantastic reposrts that will help you create a realistic budget. It also has functions that allow you to create estimates by increasing or reducing expenses or increasing your income).

Recession Tip 5: Save money by tracking your expenses by using a credit card. There are some credit card companies that are now allowing you to download detailed transaction reports in a format ready for most personal accounting software, like Quicken. Recently, the credit card company pushing this capability the most has been Discover. The only drawback to doing this is that you need to be disciplined enough to pay off your credit cards every month so that you don’t get stuck paying interest. And that brings me to Recession Tip 6.

Recession Tip 6: If you carry a monthly balance on your credit cards, I highly recommend that you don’t, you can save money by requesting a reduction in the interest rate you are being charged. For whatever reason some people are so scared of the credit card company that they don’t want to do this. Here is the reality, If you pay on time and are never late there is no reason you should be scared of asking your credit card company to lower your rate. If they refuse to lower your interest rate just stop using that card. On average Americans have four credit cards at any one time. Just use the credit card that agrees to lower your interest rate.

Recession Tip 7: Many people pay their credit cards late. You can save an average of $39.00 per credit card per month just by paying your credit card bill on time. For the average person that means you can save a lot of money every month just by paying your credit cards on time; about $156.oo per month. If you leverage Recession Tip 3 and you schedule a payment through your banks online bill pay service then you will never be late. Besides, a lot of people believe that credit card companies mark payments late when they really were not. Online bank payments are done via wire transfer. Once the credit card company receives the wire transfer there is no denying that it was paid on time.

Recession Tip 8: you can save money by being and staying organized. My life is hectic. And, if you are like me the bills are almost always the last thing on my mind. So I have designated one day a week to pay bills. I also have one place where all the bills are put as soon as they come in. If they are bills that are scheduled to be paid through online bill pay then I verify the balance at my banks website then file the bill as paid. If the bill is an irregular bill I either setup a payment through online bill pay or if I have the money I pay it right away. Because I go through this process once a week there are only about four or five bills that need to be done so it only takes about twenty minutes. Stay organized and you will save money on late fees and charges. Moreover, your life will be a lot less stressful. A lot less stressful because you won’t have that nagging thought in the back of your head that the “BILLS HAVE TO BE PAID.”

Recession Tip 9: You can save money by never using a debit card or credit card at an ATM to get cash. ATMs are probably one of the most evil inventions ever made. If you are in the habit of withdrawing money from an ATM get out of it. Not only do you waste a lot of money on ATM fees but it is hard to track exactly what you spent that money on.

Recession Tip 10: You can save money by paying yourself first. Yup, that’s right you can save money by paying yourself. You give yourself a weekly allowance to use for whatever you want. But once that money is gone, you don’t get any other money. I know this conflicts with Recession Tip 4 and Recession Tip 5 but the funds are tracked but as an allowance to you. Paying yourself an allowance to save money will at first be really hard to do. But, once you get used to it, you begin to be really frugal with how you spend your allowance. I know, this suggestion kind of eats into the ego a little bit; Back on an allowance. But, you will surprised how much money you can save by limiting your discretionary spending to a fixed amount.

Although a few of these recession tips are pretty obvious ways to save money. But, I hope there were a few tips for saving money that were new to you. Although, I did not mention it here, I really think that one of the most important tools you can use for saving money is to create a budget. Once you are able to track where you spend your money and understand where you can save money you can put together a realistic budget. You need a budget that you can follow. You can have the most well thought out recession survival plan but if you do not follow your budget you are sunk. It does not matter how well you prepare for a recession, if you can’t adhere to your budget then you are going to have problems surviving the recession if it comes knocking at your door. Use these recession tips to help you make intelligent decision about finding unique ways to save money.

On my way to work one morning, stuck in rush hour traffic, I looked out at the people in the other cars. I was struck by a realization, that although the people around me are all affected one way or another by the recession it was affecting them each in their own individual way. Following that line of thought, I realized that the idea of surviving a recession would probably have a different definition for each person. While some people have been directly affected by the recession, other people only know of the recession in news stories. People that know someone that has been directly affected by the recession, either themselves, friend or family, would look at surviving the recession in a completely different manner than someone that only knows of the recession from reading news articles about the recession or watching the nightly news. So that got me thinking about how surviving a recession would be defined by different people.

Obviously, surviving a recession means different things to different people. Read more »

Most people, myself included, never think about preparing for a recession. It simply never crosses our mind. Well the time has come. Financially surviving a recession takes preparation. It does not matter if the economy is already in a recession. If you have not already set out a game plan now is the time.

The biggest thing about recessions is that they are like snakes. You know they are dangerous. You know they can be deadly. But, until you get bit by a snake you don’t think about preparing for the consequences. But, once you’ve been bit, you will take the necessary precautions to avoid being bitten again, or at least mitigate the consequences. Read more »

If you are prepared for a recession then the you should be able to prosper during the recession. Being able to prosper during a recession is where you want to be financially. In my lifetime there have been five recessions; 1973, 1980, 1990, 2001, and 2008. Of the first four how often did you wish you had been in a position to take advantage of cheaper real estate or cheap stocks. If you were old enough to have understood the opportunities, and I guess cared, then you remember thinking about wanting to have been in a position to take advantage of the financial opportunities that a recession can bring. Most recessions in modern history have been very short only lasting a year or two. But, before the 1960s recessions usually lasted for at least five years. Can you imagine an economy so bad that it takes five years for it to recover. The longest recession in U.S. history lasted for twenty-three years. The point is that if you prepare for a recession you can prosper during a recession. many people who are wealthy today became rich because they were in the right place at the right time, and they were prepared. Read more »

Good planning is essential to prepare for a recession. Just because the recession does not seem to be affecting you know does not mean that you should not plan and prepare for the possibility that the recession will inject itself into your life. Preparing for a recession means setting aside funds to cover expenses if a layoff occurs. Preparing for a recession means creating a budget so you are able to make the necessary critical choices. Preparing for a recession means tracking your expenses so that if you have to make budget cuts you can make intelligent decisions that will not affect your financial future or your current lifestyle.

There are three things you need to do to properly prepare for a recession. Read more »

Many times when preparing for a recession people do not think of reducing debt as a strategy. But, if you have sufficient income and are able to save money to be used for surviving a recession and you have a good chunk left over you should really consider paying down your debt as a means of further protecting yourself from a recession.

Every bit of debt that you pay off increases your monthly cash flow. The better your monthly cash flow the better your chances are of surviving a recessions. Over the last thirty or forty years many people have used credit cards, home equity lines of credit, and other debt instruments as a means to live beyond their income capabilities. Read more »

Creating multiple small streams of income is probably one of the best ways to prepare for a recession. It is not just enough to increase you income as a means of surviving a recession. If you loose that single source of income the recession will affect you just the same. By, increasing your income through multiple small streams of income your are protecting that new income by spreading it over multiple sources. This means that if one stream of income dries up it will not affect your strategy for surviving a recession as much as if you had only a single source of income.

Preparing for a recession requires the implementation of two actions. Either reducing expenditures or increasing income; or both. These are the only ways to survive a recession. By creating multiple small streams of income you are hedging against the possibility that any one single income source will disappear. Read more »

Increased income is critical to surviving a recession. Preferably, this new found income should not come from your current job. It should come from alternate sources like a second job, contract work, new small business, or even an online business. If you are someone that has cut their expenditures to the bone but still do not make enough money to save to prepare for a recession or make the critical decisions necessary to survive a recession, then for all intent and purposes preparing for a recession, to you, means increasing your income. By the same token, if you are someone that has enough income to make those critical decisions but your job is in jeopardy then surviving a recession means increasing your income as well. Surviving financially during hard economic times like recessions means maintaining or increasing your income. You want to avoid taping into reserves like retirement accounts and your children’s college funds. Read more »

I guess it is pretty common sense that if you want to survive a recession you need to keep your job. Not everyone is affected by a recession during at the same time. Many people do not even think about the recession until it starts to affect them. Surviving a recession means that you and your family are not financially ruined. It means that you and your family have not only a roof over your head, a place to live, but that you are able to sustain your current life style. Everything else is extraneous expense. Unfortunately, until people have to start making the tough decisions about paying a power bill or making a mortgage payment they never think about surviving a recession. And, most people do not think they have to make those tough decisions until after they loose their jobs. Your best bet to survive a recession is to stay employed. But, that does not mean you should not prepare for a recession. If you prepare for a recession before you loose your job or suffer some other financial set back then you will be able to ride out the bad economy retaining your current life style. Read more »

Surviving a recession will be much easier for you if you are already a frugal person. Frugality is a mind set. Those that have this mind set are, by their very nature, prepared for tough times and are already prepared for the potential recession. A frugal person is a thrifty person. They weigh the prose and cons of spending money and take more time to determine if the money they do spend is going to pay off. It is this thrifty mindset that enables a frugal person to plan for surviving a recession and not even know it.

There is a difference between a frugal person and a cheap person. Being cheap only means that you purchase lower cost items. Being cheap does not necessarily mean that you are capable of preparing for a recession. Read more »