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Managing Money During a Recession: 9 Tips for Surviving a Financial Crisis

Properly Managing Money During a Recession is a key part of being financially stable and building wealth over time. Here are 9 tips to help you do that.

Need help Managing Money During a Recession? Gone On FIRE is here to help. Here is some advice so you can make clearheaded decisions with your money.

9 Tips for Managing Money During a Recession

1. Take a Second to Breath

Managing MOney During a Recession Step 1 - Breath
Take a Deep Breath

Did you do it?

Breath in.

And breath out.

This is actually scientifically proven to help you relax and to reduce stress. Here is one breathing exercise you can try right now.
How to use 4-7-8 breathing for anxiety

It’s important to approach your money, and your life for that matter, with the right perspective.

Remember that others are scared and fearful as well. Take some time be kind to one another. Say hey to your neighbors. Give your friends and family a call.

Ask yourself, “What can I do to help others right now?”

2. Don’t be impulsive

Doing anything out of fear and while stressed out is Never a good idea. It’s important to make clear, informed decisions with your money. You worked so hard for it!

Remember: When you’re in a crisis, facts are your friends.

I know Managing Money During a Recession can be scary, but it doesn’t have to be. Give yourself time to make a plan, review the plan, and then execute the plan. We’re in this together.




No one jumps off a roller coaster in the middle of the ride. If you’re still thinking about jumping off, just remember that during the freefall is probably the worst time to jump off.

Stay for the ride!

Just like the roller coaster, markets will go up and markets will go down. There has never been a time where the stock market has not recovered.

In fact, the market usually recovers with a vengeance.

3. Ignore What Everyone Else Is Doing

Remember everyone panic buying toilet paper?

A family of 4 would have to use the bathroom 182 times a day to go through a Costco size thing of toilet paper over the course of two weeks.

Let’s be realistic!

Stay Calm (#1) and Don’t Be Impulsive (#2). Everything will be alright, and you’ll save some money.

It will help save your budget, and help keep items on the shelf for people who actually need them.

Related: Stop Net Worth Comparison with Mainstream People

Why blow your budget on things you don’t really need?

People panic buy perishable items as well. Imagine all that orange juice, milk, and eggs that are going to go to waste over the next few weeks.

Those impulse purchases can quickly destroy a budget. If you find yourself on the fence about buying an item, give yourself a day to think about it.

Also, if there isn’t enough money in the budget, then you can’t afford to buy it. It can wait till next time.

4. Stick to your Budget

If you’re not already living on a budget, there’s no time like the present! Making a monthly budget will help you with Managing Money During a Recession and for the rest of your life. Even If you are financially independent.

I highly recommend a Zero-Based Budget. I show you have to make here: How to Create a Powerful Zero-Based Budget

Not having a budget can hurt you, because you don’t know how much money you have to work with. It will also help show you place where you can cut back and save some money on spending. (More on that at #6.)

If you or your spouse lost a job, adjust the budget for the income you do have. If you don’t have any income at the moment, make a budget using whatever money you do have. You’ve got to make temporary sacrifices to get through this.

Times can be tuff, but properly Managing Money During a Recession will help you survive and ultimately thrive in the long run.

5. What if I lost my job?

First, pause paying down debt. It’s not a priority right this moment.

However, do work with the companies you owe money to. Give them a call and work out a payment plan, ask to change the interest rate, or defer payment. They want to keep you as a customer and most will work with you.

Second, make sure you’re taking care of the most important things first when you are doing your budget. Those would be Food to Eat, a roof over your head, lights turned on, and some form of transportation. (Transportation may not be so important these days, when you’re told not to go anywhere.)

In that order.

Once those are taken care of, you can fund other bills, but look for things to cut while doing your budget.

Third, go find some work to pick up. Start a temp job or a new side hustle.

When you’re in a pinch, any source of income is good. Think about who might be hiring right now. A quick online search should reveal who needs help.

Lastly, now is the time to dig into that emergency fund. If it comes down to it, this is what it is there for. Just be sure to restock the emergency fund once the emergency is over.

6. Cut Back on Splurges

Managing MOney During a Recession Step 6 - Clamp down on expenses
Clamp Down on Expenses

It may sound obvious, but there are somethings that can slip through. Take a second to look at what can be cut.

When you’re short on money, anything extra counts as a spurge. Now is the time to eliminate any and all unnecessary expenses.

This is Managing Money During a Recession. Everything is on the table.

Online streaming services like Hulu or Netflix? Gone!

Entertainment like movies, sports, amusement parks? Gone!

Eating out? Gone!

This may be painful in the short term, but it’s only temporary. Ultimately, this is for your long-term gain!

7. Start Selling Stuff

Okay, so you’ve cut everything out of your budget that you can. It’s time to start getting rid of things you may not want that can bring in extra cash.

Everyone has stuff around the house they don’t want anymore. Clothes from when the kids were younger, music instruments, electronics, jewelry, tools, or maybe even an extra car?

Everything short of selling your kid to put some extra cash in your hands.

8. Don’t Cash Out Retirement Savings

As I mentioned earlier, don’t be impulsive.

No one jumps off a roller coaster in the middle of the ride. If you’re still thinking about jumping off, just remember that during the freefall is probably the worst time to jump off.

Ride it out!

Just like the roller coaster, markets will go up and markets will go down. There has never been a time where the stock market has not recovered.

Remember, if you take money out of your retirement account right now, you are locking in the losses.

Imagine in 2008, if someone would have taken their money out during the recession. Even in the 2020 recession, the market is still 3 to 4 times higher.

To give you an example, if someone had $500,000 invested in an S&P 500 Index Fund at the depth of the 2008 recession, that account would be worth $2 Million dollars now, even in our current financial crisis.

Properly Managing Money During a Recession is a big deal!

9. Reach Out for Help

Managing MOney During a Recession Step 9 - In THis Together
You Are NOT Alone

This is the last-ditch effort. If you can’t pay bills, or put food on your table, there are people out there who Want to help you. The only way they know you need help is if you contact them.

The church is a great place to go in times of need. There are probably community groups in your area as well who want to help out. Many areas have a local food bank to provide a meal.

Don’t be prideful and pass up help that is desperately needed. Do be honest and truthful and you will find willing and open arms in return.

Also, after you’re back on your feet, don’t forget about the help you received from others. Give back to them, and at a minimum, say, “Thank you.”

Did these 9 tips on Managing Money During a Recession Help?

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It’s not the first time I’ve posted about surviving a recession. Here is more help to get you through this recession, and what you should do once we are out of it.

How to be Prepared Before, During, and After a Recession

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