Common sense answers to questions on personal finance by Joe Plemon
A: Most economists agree that a recession is defined as a time when the Gross Domestic Product has decreased for two consecutive quarters. A simplistic explanation is that when people are buying less, business profits decrease which causes some businesses to lay people off. Therefore a recession could mean that you lose your job.
I recommend three things you need to be doing, whether a recession is imminent or not.
1. Change your concept of job security.
Your job security should never be based on whether your employer lays you off or not. True security is based on your ability to produce. Study, learn, plan and dream. The only difference between your career status today and five years from now is the books you read and the people you talk to. We live in a changing world and we need to change with it. Never settle for status quo.
2. Get out of debt.
Losing your job could be the best thing that ever happened to you. It is the impetus, for some, that pushes them to a time of great creativity and purpose. But simultaneously struggling with debt could paralyze those creative juices. Get out of debt now.
3. Build an emergency fund.
If you have three to six months of living expenses set aside just for emergencies, you will be able to breathe while seeking new direction. An emergency fund is a critical part of any healthy financial plan and is a life saver should you lose your job unexpectedly. Research indicates that if you are under 30, you have a 90% chance of being fired in the next 20 years. By preparing now for the worst, you put yourself in a position to experience the best.
Securities offered through LPL Financial, Member FINRA/SIPC
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Just wanted to add a small tip on creating a recession proof career. It would be a good idea to plan out your career or business by considering government contracting. This is a very lucrative financial opportunity that can help you stabilize financially and increase your income flow if it is done the right way.
If this is something that you are interested in to put an end to your financial worries, get yourself registered with the Central Contractor Registry which is a federal clearing house for vendors and small businesses too. Also identify a product or service that you can supply to the government and which the government needs in order to get a contract.
You can win such billion dollar contracts and secure your career or business better even during this phase of recession.