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Recession and You
Recession seems to be the word on everyone’s lips. After the previous Governor of the Central Bank announced that the country was officially in a recession, the word “recession” has now become a buzzword in Trinidad and Tobago. The reduction in oil and gas prices globally has created a domino effect both locally and internationally. Locally, this reduction has resulted in a decrease in the revenue from the country’s main export product. This has resulted in a shortage of US Dollars in the country along with unemployment and most recently the closing down of steel giant ArcelorMittal.
With retrenchment emerging as one of our citizens’ major concerns, one must remember that even in turbulent economic environments, persons will still need to buy and sell goods and services. You will need to implement certain steps to ensure that you are not blown away by this economic storm.
Here are just a few tips to help you along the way:
1. Do a Financial Evaluation:
You know that old saying: “If you fail to prepare then prepare to fail.” Well it's even more relevant now that we are facing an economic downturn. Now more than ever, you will need to analyse your finances and determine your financial standing. Retrenchment is often unpredictable and can leave you with no source of income in the blink of an eye. You need to know what debts are outstanding and make every effort to settle those debts. Debt collectors knocking on your door when you are unemployed can create added stress and problems. Take stock of your current finances and determine what needs to be done to ensure that you are financially secure for at least three to six months, or even longer if possible.
2. Be Creative:
Being creative is just as important as preparation in a recession. After analysing your finances and creating a plan, you can then find creative ways of cutting costs. The reduction of discretionary spending can help increase your savings. In these difficult times however, be aware and cautious of advertisements and marketing techniques, as these will now be heightened by salesmen and businesses to encourage consumers to buy their products via tricky means. Why not cook your meals instead of purchasing fast food? Growing your own kitchen garden can also help reduce your food bill. Think of a way that you can put into action that entrepreneurship idea that you always wanted to do to ensure you have a second income in case your career plans go awry. It may be your life raft one day.
3. Assess your vehicle expenditure:
The recent reduction in the gasoline subsidy by the government has seen an increase in the price of fuel. Finding ways to carpool is a viable option to reduce one’s gas bill, and as an added bonus, reduce traffic and vehicle emission. Financially though, it can reduce both your gas bill and your vehicle repair bill as it decreases the wear and tear on your vehicle, thereby enabling you to add more funds for your savings plan.
Remember that a recession doesn’t last forever, but its effects, if not managed properly, can last beyond the recession. It is important to continuously monitor the economic climate locally, regionally and internationally. The media is a good source of information to know what is going on worldwide. A recession affects everyone and it is important to understand that you are not in this alone. Remember that strategic planning and adjusting one’s lifestyle appropriately is key to weathering this storm.