A recession is a big drop in economic activity that happens all over the economy and lasts more than a few months. In real life, a recession is when unemployment increases, more businesses fail, and the economy is generally in bad shape.
When it comes to money, recessions can be very scary for the average person, and they can be more frightening for boomer women.
Since they are retired, boomer women don’t have to be worried about losing their jobs during a recession. But they do have to think about how to protect their retirement funds.
Tips to Help Boomer Women to Thrive in a Recession
Save Some Money
Retirees taking money out of their savings should keep enough cash in their retirement account to cover their costs for about a year. Most stock bear markets last for about a year. If you have a choice, you shouldn’t sell stocks when the market is going down. If your investments lose 10% and you take out 5%, that means your account has lost 15%.
The more you can cut costs that aren’t necessary, the more money you can save.
Not everyone can do it, but it’s best to make a plan to save enough money to cover basic needs for three to six months.
Know How Much You Spend
It’s essential to know how much you spend every month. Write down how much you spend every day. This will show you what money is coming in, what money is going out, and where you can reduce expenses.
If you know how much money you get and how much you spend, you can make changes that will help you get through hard times.
Pay Off Debt
Don’t get any more loans until you’ve paid off the ones you have. As interest rates increase, you should consolidate your debt into one fixed-rate payment plan and pay off your debt as much as possible. You can enroll in a debt consolidation program for an affordable payment plan.
When there’s a recession, money gets tight, so it’s not a good time to get into debt. If everything else stays the same, paying off a credit card with a 16 percent interest rate is the same as making 16 percent on your money.
Change Your Grocery Shopping Plan
Usually, women are in charge of grocery shopping in most households. I have a few tips for grocery shopping. The first one is to make a meal plan. Second, buy generic products instead of brand-name ones and buy in bulk.
Many stores will match a competitor’s price if you show them that the same item is being sold for less somewhere else. You should also look at the stores near you so that you spend the money you’d save on gas on something else.
Spend Less for a Short Time
Spending less means you won’t have to take as much money out of your investments. The cuts don’t have to last forever. Even so, every dollar you save can help the rest of your money grow after the economic downturn.
You could wait a year to go on vacation or keep your car for a couple more years than you had intended. Putting off these big bills can be very helpful.
You should cut your costs even more if things get worse. You can also look for ways to earn more money to help pay for things.
Having a temporary part-time job is a good thing. Another way to help pay the bills is to turn a hobby into a small business.
What Would Be the Best Advice to Boomer Women Preparing for a Recession?
My best advice to people preparing for the recession is to start negotiating bills. That can help you reduce monthly expenses, boost savings, and build an emergency fund that you can use during a recession.
Calling service providers to negotiate bills can save you a lot of money, whether it’s for utilities, cable, internet, or car insurance. You can ask for competitive rates, discounts, or rebates that could lower your monthly payment. If a service provider is competitive with other companies, it’s even more likely that you’ll get a discount.
If you say, “I’m looking around,” that helps. If they realize you’re thinking of leaving, they’ll offer you the lowest rate.
Check out federal programs like the Low Income Home Energy Assistance Program and Lifeline, which can help you pay your bills. If you’re not sure you’re eligible for a federal or state program, you can call 211 and talk to a local expert who can help.
Conclusion
There will be a lot of scary news stories on TV and on investment websites. These news stories are used to get more people to visit a website.
Even though scary headlines are good for business, they might push you to make poor decisions about your money.
Instead, you should pay attention to investing, so you don’t make bad choices during a recession.
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Let’s Have a Conversation:
Do you think the recession will hit in 2023? Have you started planning to protect your retirement funds? Do you have any other tips other than what is mentioned above?
