Taking advantage of a recession…

Regular readers of this blog have seen a few bear markets with me. However, there is nothing regular about this bear market.

The speed at which markets have fallen has been unnerving.

Most banks are now forecasting a recession. Even if a recession is somehow avoided, there is definitely a slowdown in the economy ahead.

But a recession also provides an opportunity for introspection and smart adjustments.

Taking advantage of recession?!?

What do you mean taking advantage of a recession, you would ask?

A recession is a really bad and can impact people through job losses, wage reductions, etc.

But you can also use a recession to your advantage. If you have been paying too much for your car insurance, subscriptions, phone plans, rent, etc. this is the time to call up your company. Companies are much more likely to give you a lower rate in times like these, because they are laser focused on retaining customers during a recession.

If you have a summer vacation coming up, you should check the ticket prices. Prices are likely to fall during recession. In that case you can cancel your tickets and re-book at a lower price.

If you have been waiting forever to buy a house and the market has just been too high – well your chance may be here. As long as you have a steady job, if house prices fall, it may be a great time to make that purchase.

Basically, look at your spending through the lens of the recession and see where you can use the recession to your advantage.

Lastly, I have always advocated for an emergency fund, if you don’t have one – this is a good time to check my post on emergency fund.

Re-looking at my expenses

One thing I’ve learned the hard way: expenses rarely stay the same. They grow—slowly, silently, and steadily. One reason is lifestyle inflation. Lifestyle inflation is so common that we hardly notice it – which is why it is so harmful.

Over time, this growth in spending can take a real toll.

So doing a review of expenses periodically is good… kinda like lawn maintenance. No matter how great a job you did at trimming your lawn last month, you will have to do it again… and again.

I am looking at my expenses again. I’ve been going line-by-line through every expense, asking: Do I really need this? Is this worth it right now?

I’m especially focused on recurring expenses—subscriptions, memberships, bills—as these can add up over time. Even if I decide I need to have my Netflix subscription, do I need the premium one or the standard one or can I switch to the one with ads?

Even if you have a disciplined budgeting household, you will be surprised as to what you can find if you track and review your spending.

Making savings sustainable

Over the years, I have come to trust the process more than the person. If I can automate my savings, or put in a process to automatically save money, then it is much more easier.

I am going back and looking at my sustainable saving strategies to see if I can add more things to it. The idea is to cut back on wasteful spending without cutting joy out of my life.

As always, I am hoping for the best. Today the market went up 10%. But it is not clear what will happen next – the market may go up from here or go down.

So I think it is still worth doing these above things. As they say – hope for the best, prepare for the worst!

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