Top Ways to Survive a Recession

Worried about the current financial climate? Follow these tips to keep your money safe during a recession.We are living in a time of unique financial upheaval. With banks going out of business and talks of the recession in full swing, you may be wondering what you can do to survive and even thrive during the recession. Here are our tips to help you keep your money safe during tough times.

1. Create a budget and stick to it!

If you already live within a budget, then you may not need to read further. But, if you've had any money troubles lately, you will definitely want to keep reading. It is time to create a budget and live within it.

Yes, it can appear difficult, but once you sit down to write out all of your expenses, you will definitely see where you can cut back. Budgeting will help you relieve any financial pressure you may be under. If you are experiencing real difficulties and you cannot figure out what to do, then take a look at your expenditures and cut out any non-necessary items.

You need to be frugal in ways that work for your life. Your house, your utilities, your food, and your car expenses are a must. You need these items to live. But, there are a few areas where you can cut back:

a. Cable: You may want to consider cutting back on the 1000+ channels you pay for.
b. Grocery Shopping: Shop at grocery stores that provide coupons or discounts for club members. Then choose the brands that are on sale or go for the generic brand. Stockpile your staple items when they go on sale.
c. Coffee: We all love our morning coffee, but you might want to consider making coffee at home a few mornings a week. The 3-5 dollars you'll save every day can add up!
d. Meals Out: If you eat dinner out every night or go to lunch every day, you may want to limit meals out to weekends and consider cooking weekday dinners at home and brown-bagging your lunch.
e. Gas: Limit your driving as much as possible. Take a bike to work, especially if you live in a climate that is moderate all year long. Consider public transportation or carpooling if possible.

Take a look at your credit cards. It is critical to pay down your debts so as not to amass any late fees (more debt) or any dings on your credit report. If you can only pay the minimums, then do so. But make sure to pay those debts down. One easy way to start making a dent is to always pay at least twice the minimum. And don't incur any more debt.

Sticking to a budget can be difficult. But taking this step will help you weather any financial storms in the future.

2. Put any extra money into a savings account

If sticking to a budget means that you have a little extra money each month, then congratulations. You should take that extra money and put it into a savings account. With the stock market in serious flux, you may want to keep your money somewhere more stable. The easiest way to make sure your money is safe is to put it into a bank or other federally-insured account.

There are many different kinds of savings accounts, so take the time to research what type of account is best for you. The best way to stay protected in any market is to save for a rainy day.

3. Think about investing in Municipal Bonds

If you've been watching reports lately, then you may have recently heard discussion about Municipal Bonds. Everyone wants a safe investment opportunity when the markets spiral, and Municipal Bonds may be right for you. They are fairly conservative, yet they do earn you money. It may not be the 20% growth of the stock market a few years back, but they can yield up to 5%. The growth is steady and the investment is reliable. The best part is that the interest you earn may be exempt from federal taxes depending on the type of bonds you choose. Other relatively safe investments are Treasury Bills, FDIC money market deposit accounts, or up to $100,000 at any one bank (or double that for jointly held accounts).

These aren't the only options. A great first step towards investing safely is to talk to your financial planner regarding your options in the current market. There are a number of different bonds, 401k programs, and other investments you can look to as well.

It is time to get started

The best thing to do is to stop procrastinating. It can feel daunting but once you get moving, your financial future will be more secure and you will feel a whole lot better.