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Ten Ways to Save Money in a Recession

The credit crunch in 2008 hit consumers and businesses alike hard. We can’t really say we weren’t expecting some form of downturn in the economy, but the magnitude and scale we’ve seen thus far, many would admit it’s worse than expected. Despite all the negativity and doom and gloom surrounding us, are there things we can adopt to help us pull through the economy downturn? Read on for easy and pragmatic steps to save you bundles of cash, upwards of thousands per month!

Ten Ways to Save Money in a Recession

1. Reduce disposable income spending and divert to pay off high interest debt. You should NEVER maintain balances on credit cards, this is a sign of financial stupidity. It’s not weakness, it’s dumb to believe you have money at your disposal in the form of a 20% loan from a credit card.

Reducing disposable income means eating out less, purchasing less unnecessary items such as news clothes or shoes. It means downgrading your cable package, internet, movies to movie rentals, and prime steak to hamburgers.

2. Don’t try to sell your house for 2004 prices. Too many people are still in a house that they can barely afford because they are trying to sell it for more than anyone will buy it in today’s market. If you can live without selling then you should wait 2-3 years before downgrading the home. Let it appreciate the value it’s lost over the past 2 years.

3. Find a cheap/free living situation. Move in with your parents/relatives/friends if you can. Students may want to skip the move out stage by a year until they find a job and have a nice savings cushion.

4. Additional jobs. If time permits find another part-time job. This of course, is not necessary if you reduce your spending per month. People who get part time jobs usually want to maintain standard of living and therefore work themselves to death to pay for it.

5. Increase your savings, and with those, invest in a low market. PRices for investments are at an all time low, you can easily double your money within a year in the right instruments.

6. Learn to cook at home, and how to shop better at the grocery store. If you buy real nutritious food from the grocery store and cook it at home instead of eating out, you will save a significant amount of money each week. Not only should your health improve, but you, along with your shopping list, can save hundreds.

7. Consolidate debt. There are services out there, some better than others, that will help you reduce your overall payments on debt per month by putting them all under the same roof. However, remember, the point of paying it off sooner is you in fact still shell out the same amount of money, but now part of it goes to an investment that accrues interest.

8. Reduce your energy footprint. Get more efficient lighting, shut off lights, electronics, computers when not in use. Shut off the extra fridge or freezer and save upwards of $500 bucks a year.

9. The government is going to create new programs to increase skills sets among workers. If you think you could benefit from a skill upgrade keep your eyes open for programs that are coming out. You’re bound to reap the benefits of some of the new programs but only if you pay attention to the latest offerings.

10. It’s the new year! End your senseless addictions to Starbucks, cigarettes, and McDonald’s hamburgers.

DON”T: Move your investments. If you’ve already lost more than 50% of equity it’s is NOT the time to move to lower-risk securities like bonds during the market shakedown. You should have done this before the meltdown not during. Since prices can’t go much lower then you may be stuck to wait it out. To loose 50% in a low return (2-5%) investment tool is a poor move.

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