Believe it or not, a recession is a fact of life. Why? Because it is part of the business cycle and this is bound to happen when the economy expands, slows down until it hits rocks bottom and then recover once again.
The only difference between a recession and the four seasons we experience in a year is that this problem does not happen often. It may take years before this happens again and in our county’s history, the last time we had a recession in 2000.
When it does happen, experts won’t admit that it is there even if everyone around knows that it is. How? By looking at various factors which include consumer spending, the unemployment rate, industrial production, real income and wholesale trade.
One solution to help stimulate the economy is to lower the interest rate. But since this is not enough to make the problem go away, we have to our share until this is over. Companies have to make job cuts but the bad news is that you put more people out of work because this is the only way to stay in business.
But is putting people out of work the only solution for a business to survive? Some experts disagree because if the company is able to focus on customer service, lower price points and make cuts elsewhere, you help prevent the unemployment rate from getting higher.
On your end, if you still have a job, you have to spend less because the prices of goods will go up which is why you only have to buy the essentials. One thing you have to cut down is your fuel expenses so you might want to trade in your SUV for a smaller car that has better gas mileage.
To make sure you are not on the list of the next people to be axed, find ways to make yourself valuable in the office by taking on other responsibilities. If this is not enough to put money on the table, see if you can get a second job until the situation improves.
There is an upside to a recession. If you need money, you can borrow at a lower interest rate and you will be able to buy stocks, bonds and property at very affordable prices.
A recession is a fact of life and if you think that this happens only in the US, it has happened in other countries as well. What makes this current one so different from others in the past is the fact that what started here is now spreading around the world which is why nations are talking to one another to help prevent it from getting worse.
How long will this recession last? It is anybody’s guess but this will last until the end of the year with hopes that things will improve by the first or second quarter of next year. How it affects people will be different depending on their current financial situation so before it is too late, save up. If you can, invest in a few things which you know will make you money in the future. For those who are unsure, you better hire a financial planner so you are safe if ever life throws you a fastball.