With the cost of living rising, the stock market crashing, interest rates rising, and layoffs full of headlines, it seems everyone is bracing for a potential global recession in the near future. But how will it affect you? Are you prepared to face it?
For context, more than half of Americans live paycheck to paycheck, and nearly a third have no savings at all. If you find yourself in a similar situation, here are seven ways technology could help you during an economic downturn.
1. Find job opportunities with LinkedIn
In a recession, many companies resort to laying off employees to cut costs. If you are one of those who were laid off, you can use LinkedIn to search for a job. Small businesses and startups rarely have enough cash flow to comfortably survive a recession, so they likely won’t be hiring right now.
Therefore, it is recommended to target large established companies that are still hiring talent, albeit slowly. You are likely to face some serious competition as many people just like you are looking for jobs after being laid off, so you need to update your resume and learn how to write emails requesting a job opportunity.
2. Find independent gigs with Upwork
In addition to looking for work, consider searching for freelance jobs on platforms like Upwork or Fiverr as a secondary source of income. As a freelancer, you have more control over your hours and are therefore able to undertake more projects to increase your income.
With that said, remember that freelancing is not as stable as a full-time job. In fact, you’ll likely have trouble finding new freelance clients, face inconsistent workloads, and have to settle for low-paying clients at first.
However, over time, you can build a good portfolio and collect some positive testimonials that will help you attract high-paying customers. Be sure to learn how to set your own prices, approach customers, and close deals; You can also use these apps to find a side job.
Consider charging by the project instead of by the hour, as the latter punishes you for being a fast worker; charging per project is easier and reduces uncertainty for both parties.
3. Manage your household budget with budgeting apps
If you don’t already have a written household budget, now is the time to do so. There are many budgeting apps that help you manage your money, considering your income, expenses, loans, insurance premiums, investments, and more. The more organized your finances are, the more control you will have over them.
You can also use good old Microsoft Excel to create a household budget if you find it easier to use over-budget apps. You can find and download free templates online, so you don’t have to start from scratch and can simply edit the data according to your income and expenses.
A great way to manage your household budget is to follow the 50/30/20 rule. According to him, 50% of your income must be used for your needs such as food, rent, gas, electricity, internet and insurance; 30% towards your needs; and 20% for your savings and investments.
4. Create a Stock Watchlist with Google Finance
You can create a stock watch list on Google Finance to keep track of your favorite stocks and look for investment opportunities during a downturn. You can also use the tool to compare stocks, indices, and markets in real time, keep track of different currencies (including cryptocurrencies) and futures contracts, and view the latest market news.
You can also use Google Finance to perform fundamental analysis of a company by looking at its income statement, balance sheet, and cash flow to see if it has been able to weather the storm. Please note that Google Finance is not a trading application; you cannot use it to buy or sell securities, but only track them and conduct research.
5. Cancel your subscription plans
If money is hard to come by, you should prioritize your needs over your wants and try to save as much as possible. This means canceling your Netflix, Hulu, or Amazon Prime subscriptions, at least until you get a job and can afford these luxuries again.
You don’t have to put all the entertainment aside; After all, you can always watch YouTube videos, read books at the public library, or download and play free offline games on your phone. Heck, even board games will do. Cancel as many subscription plans as you can and save all that money for your unforeseen needs and emergencies.
6. Sell your old stuff on Facebook Marketplace
You may consider selling your old stuff on marketplaces like Craigslist, eBay, or Facebook Marketplace. If you choose to do so, you can increase your chances of finding a buyer by posting your item on multiple platforms, taking high-quality images, and writing an honest and detailed description.
Buying and selling things online comes with some risk, as you would essentially be meeting strangers to deliver your item. If you decide to ship the item, there is a chance that the buyer will never pay you. Therefore, it is better to follow these tips to stay safe when trading items online.
7. Increase your financial education from trusted sources
Perhaps the most important thing you can do in a recession is increase your financial literacy. You can read articles, watch YouTube videos, listen to Spotify podcasts, or purchase Udemy courses that promote financial literacy and educate you on how to save money, pay off debt, build an emergency fund, increase your credit score, and more.
However, be sure to only follow trusted creators, preferably with a financial background. Good, qualified creators will focus more on teaching you important concepts like inflation, depreciation, volatility, and compound interest. Bad creators will promote get-rich-quick schemes and push you to invest in high-risk assets.
An economic downturn is a very difficult time for many, but it doesn’t have to be for you if you take steps to ensure your financial security. With the tools we listed above, you can find new job opportunities, search for freelance jobs, better manage your household budget, increase your financial literacy, and more.
If you live paycheck to paycheck, do your best to reduce your expenses as much as you can, and then use those savings to build an emergency fund worth at least three to six months of household expenses. This will serve as a financial safety net in case you are laid off or need money for an emergency.