The Real Story: Surviving the slump
Here are some ideas to save yourself
Posted on January 28, 2008
Last week the world’s leading economists, policymakers and businessmen met in Switzerland for the weeklong World Economic Forum, and the news that came out of the meeting was not good. According to The London Times, experts at the forum have predicted that “a full-blown, prolonged recession in [the United States] is now inescapable, with the rest of the world set to be dragged into a severe global slowdown.”
But what does this mean for the average American worker? Will the job market and workplace become a no-holds-barred steel cage fight to the death? Not necessarily, but now is the time to prepare for the worst, since nothing is ever guaranteed in our
economy.
The following tips will help you and your family survive the looming recession and you might end up better off than before.
Make yourself indispensable at work
The most important part of weathering a recession is to avoid losing your job, and the best way to secure your job is to make yourself stand out. After all, who gets laid off in a recession? The excess weight of the organization that is not essential to the company’s future. Therefore, it is crucial that you embed yourself in the vital functions of the organization.
To do this, take on the most important projects, volunteer to work on new initiatives and always go into work with a positive attitude. Do whatever you can to show your worth to upper-level management and they’ll cower at the thought of losing you.
Network
Most people tend to wait until after they lose their jobs to start calling friends and family to look for new ones, which is obviously too late. In today’s world, networking is one of the best things you can do to ensure that you will be able to quickly find a new job.
In a recession, employers are flooded with applications and résumés. Going through friends and family will help bypass the chaos and get straight to the decision makers. Networking will also give you a boost over your competitors who will likely be posting résumés onto monster.com.
Minimize your debt and cut down expenses
In 2006, the U.S. personal savings rate was -1 percent, meaning that as a nation we spend more money than we make after paying taxes. When we spend beyond our means, we are forced to borrow money to make up the difference.
The people who tend to suffer most during recessions are the ones who have procrastinated in resolving their financial troubles, especially their credit card debt. The average American with at least one credit card has approximately $9,000 in credit card debt and the average interest rate runs in the mid- to high teens at any given time. In the event that you lost your job, nothing will bury you faster than excessive credit card debt.
The key to owning a credit card is moderation. Don’t use it unless you know for sure that you can pay off the bill at the end of the month or soon after.
How can you minimize your debt? You can start by figuring out your spending patterns and identifying unnecessary expenses. Keep a list of all your expenses, debt obligations and personal income every month. Once you’ve done that, cut out the things that you don’t absolutely need and direct that money toward minimizing you’re debt, once your debt is under control then start saving. Do yourself a big favor a start chipping away at your debt now; you’ll be glad you did later.
Take advantage of interest rates
Homeowners received good news last week with the surprise interest rate cut by the Federal Reserve, which lowered the borrowing costs for millions of mortgage holders. As the rates continue to fall, now is the perfect opportunity for those with high adjustable-rate mortgages to refinance to a lower and preferably fixed-rate loan.
The key to surviving in a recession is to get ahead of the curve. In a few months, the government will announce the recession is official. Everyone else will panic, but if you follow my advice, you’ll be resting easy.
Tony Spadaccia is a freshman political science and business management major.
