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Recession Survival Tips Are Not Just for Recessions

We should not wait for economic turmoil to force us to do what we should have been doing all along.

Anybody checking the headlines of business news channels or the cover lines of magazines including Black Enterprise, will see plenty of advice on coping with a struggling economy, rising prices and the threat of recession.

Pay down and avoid credit card debt. Cut costs and eliminate unnecessary spending. When you do spend, shop around for the best bargains.  Boost personal savings; establishing an emergency fund equal to at least six months of living expenses. Create a household budget and stick to it.

The funny thing is, these are the smart money habits we should have been practicing all along, the wealth-building lifestyle that Black Enterprise has always stressed in both good and tough economic times. In fact, the people suffering most during these times of economic stress are the ones who ignored these common sense rules of personal finance. When times were flush, they bought more home than they could afford, bigger cars than they needed and made every luxury a necessity. But if you look around, you’ll notice that some of us are less stressed than others. They are the ones that used our most recent and lamented period of economic growth not to spend more, but to boost savings, reduce debt, control spending and solidify their financial positions.

The silver lining of these tough economic times is the bracing but liberating realization that we can live on less, and we should have been doing so all along. Good money management habits are not just for recessions. We should not wait for an economic downturn to force us to do what we should have been doing anyway. Let’s hope that we retain that lesson when the economy rebounds.

Alfred Edmond Jr. is the editor-in-chief of BlackEnterprise.com

ACROSS THE WEB
  • Coretta Jackson, MBA

    Exactly Alfred!

    We have to become better stewards…and learn to manage our resources efficiently, in good and bad times.

    Coretta Jackson, MBA
    iKwanzaa.com

  • mcvolkan

    It’s not true that “lack of certainty” is one of the top 50 elrbopms businesses face. Businesses themselves cite declining demand, not the GOP-talking point of “uncertainty in regulations,” as the main problem they face. Don’t take my word for it. Here is Obama campaign donor, Steven Wynn, who heads a Fortune 1000 company:Today, Obama supporter, George Soros, sent a letter to his investors announcing that he would be closing his fund to outside investors because of new financial .Heck, I took a cab home today, and the first cab would not accept my credit card because fees had risen in response to the consumer protection act, or whatever heck that bill is called that protects people who run up their credit cards.People also are not hiring because of uncertainty regarding the costs of the Healthcare Reform Act.Declining demand is issue #1, but regulatory uncertainty is issue #2. It may be annoying that the GOP is using it as a talking point, but businesses operate better when the rules of the are clear. Right now, they just aren’t. Bond markets are telling us to issue more debt– growth is weak, interest rates on bonds are rock-bottom low (below zero on 5 & 7 year rates). The bond market is currently operating under the assumption that the debt ceiling will be increased moderately and that there will be a reduction in spending growth and a modest increase in taxes. It is not banking on another stimulus. If the President were to announce a new stimulus program, yields would rise and bond prices would fall as naturally as an apple falls from a tree because of gravity. The reason yields would rise is that the more debt an entity assumes, the higher the risk of default. No one would continue buying US treasuries without more compensation for the additional risk.