Redefine Finance !!!

We should not make any mistakes in our financial plans as recession is here. While we do not know how long or painful it will be….The stock market has lost more than 20% in the last 10 trading days.


But, there are steps which we can take to make us better prepare for difficult financial times ahead. There are some basic things we can do. We need to plan following things:

(1) Income (2) Expenses (3) Savings and (4) Investment.

Protect Your Income during a Recession

1. Protect Your Job: Protecting your job should be the number one priority by putting in a few extra hours, working a little harder, and improving your skill set. Those who stay employed during a recession generally ride out the storm just fine.

2. Be Ready For Layoffs: While we should do everything what we can to keep our jobs but some layoffs are unexpected. This means having your resume updated and knowing where you could apply for a job.

3. Earn Extra Money: Make extra money blogging, but that's just one of many, many ways. The beauty of extra income is that it goes right to the bottom line. It could make a huge difference if you ever lose your job.

Reduce Your Expenses during a Recession

1. Evaluate Your Mortgage: One of the positive elements of our current financial crisis is that interest rates are low. If you have an adjustable rate mortgage, it's time to see if you can refinance to a fixed rate loan. Notwithstanding what we all hear on TV or read in the papers, those with good credit can still get mortgages.

2. Refinance high interest credit cards: If you are paying high interest rates on credit cards then consider to move balances over to a 0% APR balance transfer card or a low interest credit card. When considering this option, keep in mind three things:

• The interest rate after the introductory offer: Zero percent introductory rates do not last forever, so make sure you know what the interest rate will be once the 0% expires.

• Balance transfer fees: Today, virtually all balance transfer credit card offers charge a fee for the transfer. Make sure to avoid unlimited fees if at all possible.

• Don't use the card for anything else: One of the big gotchas of credit card balance transfers is that if you use the card for purchases in addition to the balance transfer, your purchases usually get charged interest.

3. Reduce Spending: This is obvious, but it is important to recognize that there are many ways to cut spending. There are literally thousands of ways to save money. Pick those that work for you, and start saving now. As part of this, seriously consider a cash back credit card. If you pay off your balance every month.

Saving and Investing During a Recession

1. Don't stop saving for retirement: Do not sell any of your investments. As Warren Buffett would say, I'm trying to be "greedy when others are fearful”. Be persuaded that what we do with our investments now and in the immediate future will dictate more than anything.

2. Rethink your emergency fund: It is more important now than ever to have an emergency fund.

3. Don't rely on a home equity line of credit: This point is critical. You may have available credit on your home equity, but did you know the bank can eliminate that credit? Go find your home equity line agreement, and you will see that if the value of your home falls or your financial situation changes, the bank can reduce the amount of your available credit.