We are not in a recession just yet, but the skyrocketing prices of goods and services are enough to put us on our knees. Groceries cost almost twice as much for the same number of items, restaurants sell extra rice at atrocious prices, and booking a Grab car costs an arm and a leg. It’s looking bleak. But the situation has also made many of us conscious of how we handle our finances. If you don’t know where to start to save yourself, here are useful recession money rules from millionaires you can follow.
Buy in bulk
If you can, it’s better to buy in bulk that way you get to maximize your money. You reduce grocery trips and you can concentrate on buying the essentials.
The best products to buy in bulk for cheap are toiletries, laundry essentials, cooking oil, vitamins, canned goods, pet food, and frozen meat. Aside from saving money, buying in bulk is also shopping consciously since you’re doing away with excessive packaging.
Build your emergency fund
This cannot be said enough. While you’re still living comfortably, start allocating more of your income to savings. Even P50 a week can be a good start. Just make sure you don’t stop adding money to build an emergency fund that should cover 6-12 months of your expenses. Even without a recession on the way, an emergency fund is a must-have financial cushion for, well, any emergency you’ll find yourself in.
Most people think investing is wading in dangerous waters and in a way it could be. There are horror stories of folks who invest their whole savings only to get none of it back. But there are ways to invest that won’t put your money at risk.
You can check out Pag-IBIG MP2 where you can start investing for as low as P500. There’s GInvest with a starting amount of P50 and is quite convenient if you already have the app on your phone. You can also dabble in stocks but make sure it’s in recession-proof industries. Speaking of…
Work in recession-proof industries
Make a career in industries like tech (IT professionals), medical (healthcare providers), education (teachers and professors), utility (plumbers, electricians, etc.), etc. Society will always need these industries to function so even in the face of an economic decline, you can expect these jobs to be recession-proof.
Create additional sources of income
When the pandemic started, more people suddenly found themselves starting a new business or diving into the crazy world of freelancing. In doing so, they’ve created additional sources of income for themselves, an extra layer of financial security. In a recession, you have to brace yourself for layoffs or having a tough time looking for a new job. Side hustles like virtual assistant jobs, copywriting, managing projects, or even being a Grab, foodpanda, Angkas, or Joyride driver are good ways to make additional income.
Resell your stuff
You’d be surprised to find some of the things you can actually do away with. Go through your closet and pull a Marie Kondo. It’s time to let go of the ones you haven’t used in over 6 months because no, you probably won’t be “wearing that someday.” Check if you’ve got unused gadgets and appliances that someone else would want. Anything goes! You’ll never know what people need. To start selling your preloved items, you can post on Facebook Marketplace, specific Facebook groups, or at Carousell.
Pay high-interest debt ASAP
We won’t sugar coat it — the best way to get rid of debt is to pay it. You have to make sure you pay on time and if you’ve got extra cash, you can pay a larger amount. If you’ve got high-interest debt, paying more and paying on time will free you from the debt earlier. Here’s another hack: If your debt is with a credit card company and you’ve got a good credit score, you could even negotiate your interest rates.
Delay major purchases
Put a pause on spending big for a while. If you’re planning on getting a new car, buying a condo, or purchasing a house, you might want to delay for a little longer. Although it is true that in a recession, you might get better deals since the demand is low, ask yourself if the move would be a huge blow to your wallet. Can you really afford it right now?
What are other recession money rules you can give? Share it with us in the comments!