I read today that 90% of British people say they have been affected by the current economic crisis. The problem of most of them seems to be inflation. If we get a recession later this year, it could get much worse.
But during times like these, not everyone is affected equally. Some end up having to choose between heating and eating, while others live a pretty normal life and don’t notice any change.
I’d prefer to be in the latter group, and I’m sure you would as well.
Economic crises and recessions are a very regular occurrence, so we should always plan ahead for them. That way, we’ll never be caught out.
Here are 5 ways that you can avoid the turmoil and come out ahead.
Earn a side income
This is my preferred option. If you earn more you can still keep the same lifestyle. There’s no need to cut back.
Suppose your regular spending is $3,000 a month and your costs rise to $3,300. That means you’re $300 short.
The most obvious way to fix this is to earn an extra $300.
That may be easy for some and almost impossible for others. That’s why it’s best to plan ahead.
My way of earning an extra income is writing here. It keeps my income ahead of the rising bills, which I’m seeing all around me at the moment.
Writing here isn’t a quick fix solution though. It usually takes months before you start earning a decent income. That’s why forward planning is so important. But it’s better to start late than not start at all.
It may not help you this time, but there’ll be another crisis and recession along in a few years.
Depending on your job, it may be worth asking for a raise or seeing if you can work some overtime. If you’re earning $30 an hour, you only need to work an extra 10 hours a month to get an extra $300. That’s just 30 minutes a day Monday through Friday.
The next most obvious solution is to spend less. What you can cut back on depends on your current spending. Maybe you can use the car less, turn down the heating or aircon, or put off that vacation.
This can be quite painful and depressing, but it’s better to go through some short-term pain than some long-term pain at a later date.
Don’t forget that if you live in a Western country, you’re doing better than most of the world even during these tougher times. Don’t lose sight of what you have. Showing gratitude for what we have is a great way to keep our spirits up. Things could be much, much worse.
Sell stuff you no longer need
I do this all the time, even during good times. It means I get extra cash to either spend or invest, and someone else gets to buy something for less than they’d pay new. It’s also great for the environment. With cheaper items, I just give them away.
You can sell items easily on platforms like eBay, Facebook Marketplace, and OfferUp.
I’m quite a minimalist these days though, so I do less of this than I used to.
Rent out a room
If you have a spare bedroom in your property you could consider renting it out if times are really tough. This isn’t something most people would be comfortable with, but it can bring in a nice income.
I don’t know if there are similar schemes in other countries, but in the UK you can earn up to £7,500 tax-free with the rent-a-room scheme. That’s £625 a month. Not bad at all. But you do have to put up with a lodger sharing your place.