Can Your Family Survive a Recession?
The most recent jobs data released this week showed a decline of 17,000 jobs, a surprise number. Forecasters had expected a rise of 80,000 jobs for the month of January. This is just another sign that the economy is slowing down.What does this mean for your family and how can you survive it? The biggest risk of recession for the average American is that they will lose their job and thus lose their source of income. If the economy slows down, companies are forced to cut back on expenses (like payroll) because they no longer have the sales to support their current infrastructure. Moreover, healthy companies will often be cautios about hiring new employees due to the threat of recession. Jobs in construction and manufacturing have been falling for a while, but January’s numbers also show an 11,000 drop in professional and business services employment.
If companies are being cautious with their spending during a recession, then you should be too. It may be time for you to make some spending cuts at home. Are you saving at least 10% of your disposable income? If not, take a look at your spending and see what cuts you should make. You should have at least 3 months worth of emergency funds or more. If you are not close to that number right now, its time to get moving. Try a 3 month savings binge in which you cut all but the essentials.
Also, start working on that resume. If you haven’t touched it in a while, its time for an update. A recession can be unpredictable and the possibility of getting laid off can be very real. Get your contacts organized and touch base with your network. If you don’t have an emergency fund yet, it is even more critical that you begin to prepare for a job hunt.
