No matter how well you prepare, there will always be rough patches in your career. The question isn’t whether or not you’ll face a recession, but when you’ll face one and how to best handle it when it comes up. There are a couple of steps you’ll want to follow to help you successfully get through any recession in Canada.
Stay Prepared
A recession can be a trying time for businesses, but there are ways to weather the storm. The key is to stay prepared.
There are a tips you’ll want to keep in mind on how your business or personal finances can survive a recession:
-Develop a team mindset: No one person can make decisions that impact an entire company
- Make sure you have an emergency fund: You never know when something might happen and having savings will help keep you afloat .
- Set new goals: Once you’ve completed your list of short term goals, it’s time to start setting some long term ones.
- Manage cash flow well: Make sure you know where all of your money is going and make sure it’s going where it needs to go. If not, it may not last through this tough time. It’s important to stay focused on the future and don’t lose sight of what got you here in the first place. In difficult times, lean on those who support you most and remember that tomorrow is another day. Don’t get discouraged, get moving!
Understand What Happens During Recessions
A recession is when the economy experiences negative growth for two consecutive quarters. This means that there is less money being generated and fewer jobs are available. The most recent recession in Canada was from 2008-2009.
During this time, many people lost their jobs and had to tighten their budgets. The key to getting through a recession is to be prepared financially. This means having an emergency fund saved up so that you can cover your expenses if you lose your job.
It also means being mindful of your spending and not taking on any unnecessary debt. If you can stay afloat during the tough times, you will be in good shape when the economy starts to recover. Also, it’s important to find ways to save by lowering your energy costs and reducing the amount of frivolous purchases you make.
You should keep an eye out for deals or coupons as well. Getting a second job may help supplement your income but it could also lead to exhaustion which could result in lower productivity at work or home – it’s best only to take on a second job if you’re really sure that it’s worth it!
Having some sort of backup plan like starting a small business could give you more flexibility with your hours and allow you to have greater control over how much stress you feel.
Stay Positive
It may seem like the end of the world when you hear that a recession is coming, but it’s important to stay positive. Remember that recessions don’t last forever and there are things you can do to weather the storm.
Stay positive and focused on your goals, and you’ll get through this tough time. Take advantage of opportunities while they’re available by networking with others in the same situation as you. If possible, use the time off from work to explore other areas or take up new hobbies.
If possible, live below your means so that when you return to work or go back into business for yourself you have savings for those down times again. There will be some people who will try to take advantage of people during a recession and make unwise investments. Be wary of these people! And remember, most importantly, don’t give up!
Don’t Panic, But Be Cautious
The first thing to do when you hear about an impending recession is not to panic. It’s important to be proactive and take steps to protect your finances, but it’s also important not to make any rash decisions. A recession doesn’t have to mean the end of your business or your financial security.
Make Sure You Can Pay Your Bills: Make sure that your monthly bills can still be paid even if you don’t receive a paycheck for a few months. That means making sure that whatever money you do have saved up will cover expenses like food, mortgage payments, utilities, car payments, etc.
If there is no risk of being able to pay those bills on time during the recession then chances are good that things will return to normal shortly after so don’t worry too much about selling your house or selling all of your belongings just yet. Instead, stay informed and take action as soon as you know what needs to be done (e.g., apply for unemployment benefits).
- Work With What You Have: If you need to create new revenue streams or cut back on expenses, start brainstorming now before the economy turns south again.
- Find New Income Sources: Consider some new sources of income while at the same time reducing spending where possible (without getting into trouble with debt).
- Increase Efficiency and Productivity: Create efficiencies and increase productivity by identifying areas where waste occurs and implementing cost-saving measures accordingly.
- Maintain a Strong Network: Know Who Has What You Need: Know who has what you need such as skills, resources, connections etc.
Budget For Yourself
Getting through a Canada recession in 2022 will require some budgeting.
The best way to manage your money is to set a budget and stick with it. A budget is an estimate of your income and expenses for the coming year. You can set one up on your own or use a free online tool like Mint.com.
A good way to start is by looking at your last few months’ worth of bank statements, credit card bills and other receipts. That will give you an idea of how much money was coming in and going out each month. Then you can decide what percentage of each paycheck goes into savings, retirement contributions and other savings accounts.
If you’ve been spending more than you make for several months in a row, that’s a sign that you need to adjust your spending habits — whether it’s by cutting back on luxuries or making more money through a second job or side hustle. You may also want to consider using one of many budgeting apps available today like Afterpay or Splitwise which help you track spending on things like rent, bills etc.
Budgeting is a great way to keep your financial life in order. But what should you do when the economy takes a turn for the worse?
It’s not easy to budget when there are tough times ahead and money is tight. But it’s even harder to survive without a budget.
A recession can bring about changes and challenges that affect your financial situation and force you to make adjustments.
- Stay focused on your long-term goals.
- Look for ways to cut expenses and save money on necessities.
- Don’t let emotions dictate your spending habits — use logic instead!
Save Now Before You Need It
A recession is defined as two consecutive quarters of negative economic growth as measured by a country’s gross domestic product (GDP). In other words, it’s when the economy shrinks. When a recession hits, there are often ways to weather the storm if you save now before you need it.
When you’re trying to save money to prepare for a recession:
- Build an emergency fund – Having enough cash saved up can help if you lose your job or need an unexpected expense. Try saving 10% of your income for emergencies and then supplement that with contributions from each paycheck for maximum effectiveness. That way you’ll have cash on hand without breaking your budget or spending more than you should have been able to save on monthly expenses during times like these.
- Keep up with retirement savings – The best time to start investing is before you need the money so that’s what we recommend during recessions too!
Final Thoughts
While a Canada recession in 2022 can feel intimidating and frustrating to navigate, keeping some of these tips in mind will help you come out ahead of the game.