by Mud Editorial
**This advice varies based on your income and financial situation. If you're unsure about how to move forward, you should always consult with a financial advisor.
According to the New York Times, "there is little doubt that the nation is headed into a recession because of the coronavirus pandemic." Businesses are shutting down, people are staying inside, and little spending is happening in certain sectors.
So, how can you take steps now to protect yourself from a recession?
If you don't know what a recession is, it pretty much means a period of economic decline. We were all in elementary school during the Great Recession, so it is normal if you might not remember too well how it looked like. However, since some of us are graduating soon and heading into the "real world," it is key that we take measures into consideration.
1. If you can, focus on paying off your high-interest rate debt
We recognize that it is a matter of privilege to have credit, and also to be able to pay it. Many college students often have credit cards to use for emergencies or to build a credit. If you can, try to pay off your credit debt asap, especially the one with a high interest rate. If your rate is low enough, you may want to focus more on building an emergency fund. But if you can, make paying it off a priority.
Unless you're a finance major, refinancing and stake loans might sound foreign to you. We would recommend that you consult with a financial advisor or a relative who's in the field about your possible options.
2. Save when the economy is growing
The Corona outbreak has unemployment on the rise. This situation has taught us that in a matter of weeks, our entire world can be flipped upside down. For that reason, it is important to count with an emergency fund. If you're employed, try to save up at least 2 months of expenses. If you're self-employed, make sure it's more. Being prepared in advanced for any emergency is key.
If you're in an industry where saving is hard or you live paycheck to paycheck, analyze your current spending and budget. Study each one of your bills, and you should call those companies and ask for discount programs or lower interest rates. Even if you can put aside a small percentage of your pay check, that is better in the long run.
3. Side hustles
It is fucked up that the current economy has us calling hobbies "side hustles." But the age of the internet and social media has diversified the choices we have to make additional income. Quarantine is the perfect time to research different jobs that can be done remotely. If you have the resources, focusing on what you need to start a business is also a good way.
Focus on the industries and markets that will boom when people are allowed back on the streets.
Another way you can prepare is to use the time now to learn valuable skills that could translate into better opportunities. For example, learn how to use Photoshop and the rest of the Adobe Suite. Study a new language. Certify yourself in SEO and digital marketing (there's tons of free courses online, like Facebook Blueprint). Investing time and effort on a social media business is also another great way to find an additional stream of income.
4. Reflect on your professional career path and continuing education plans
Especially for seniors, this time can be extremely stressful. If you were planning on applying for jobs soon, your search might be delayed. So, use this time wisely to analyze your career path and make smart choices about your next move. Speak to your career counselors, and if you know someone in the field you want to go in, ask them for guidance and their perspective.
This also applies to those who are thinking of pursuing graduate education.
Pay attention to how the schools you are interested are managing this situation and do your research on how students feel about those measures.
5. Cut unnecessary spending
It is possible that online shopping and food delivery have seen a rise since the outbreak. However, cutting unnecessary funds will still be relevant when the quarantine is over. As some college students probably plan to "recuperate lost time" during the fall, it is important that you focus on creating a financial plan. While not everyone has the means to splurge money, we can benefit from analyzing our spending habits and see where there is some room to save.
Cooking instead of eating out, limiting your money for going out, and carpooling with friends are a few ways where you can save a considerable amount of money.
**We recognize the huge role that privilege plays on financial planning. While these tips can be helpful to some, please make sure you take in consideration your income and financial situation. If you can, please speak to a financial advisor, or obtain guidance from a relative or friend in the field.