It’s seems impossible to avoid the word recession right now, with our feeds full of doom and gloom you are probably thinking how does a recession affect me?
The dreaded R-word can fill you with fear, uncertainty and a sense of impending doom. So this article will break things down, inform and update you on what happens during a recession and how it will affect you personally.
What Is A Recession?
During periods of economic certainty a countries economy grows, with peoples income rising as the value of goods and services (known as GDP) also rises.
Gross Domestic Product (GDP) is the measure of activity of companies, governments and individuals in a country, and is used as a tool to understand how the economy is doing.
However a bad sign for the economy is when GDP falls.
“A recession is usually defined as when GDP falls for two three-month periods – or quarters – in a row.”
When a country is in recession the countries overall economic output declines, which leads to increases in unemployment rate, falling retail sales, businesses cut their spending and manufacturers produce less goods.
As I have previously mentioned when times are good, peoples income increases as the value of goods and services also rises. When this doesn’t happen people have less money to spend on things, which is why we see a fall in retail sales.
When retail sales drop, companies profits also drop and so they become less profitable. When this happens businesses will attempt to reduce the impact of less profits by making people redundant and increasing the cost of products and services to the customer.
How Does A Recession Affect Me?
You may find that during periods of recession that you are having to spend more on essentials such as food and petrol, as well as heating and electric. This will mean that you will have less disposable income to spend on things that you enjoy such as going out for dinner or enjoying a pint with friends at the pub.
During an economic downturn businesses look to cut costs, so you could find that you don’t have job security or that pay increase or promotion you were looking to get will not happen. If you are due to graduate university you may find that the number of graduate jobs are reduced as companies look to cut costs. If you want to recession proof your career read this article which outlines the best recession proof jobs experts say are in constant demand, even when the economy is not doing so well.
The cost of lending by banks will increase as well, so if you are looking to buy your first home, the cost of doing that will increase. If you rent a property and your fixed term is coming to an end, then it is possible your landlord may increase your rent to cover their cost increases.
What can I do to prepare for a recession?
A cushion of cash.
Having a cushion of cash during uncertain times can give you some much needed piece of mind.
Having 6-9 months of saving to cover your expenses such as your mortgage, energy bills and food experts say will allow you to survive in the event of losing your job.
Now, you maybe thinking how can I manage to save that amount of money when things are already tough?
If 6-9 months of saving is unrealistic you could consider one month to begin with, or rather focusing on saving a large sum of money all in one go just focus on small amounts daily. Ultimately the amount you save isn’t important but having a saving mindset will put you in good shape for the future.
Consider A Second Job.
If your unable to create an additional pot of savings you may want to consider a second job or start a side hustle to make money on the side, to support you current income.
The gig economy has provided many people with the opportunity to work flexibly around other work or family commitments.
Deliveroo and Uber Eats offer such opportunities which allow people to work when they want and choose how many hours they want to work. If this is something you may be interested in you may like to read this article which explain how much you can earn working for Uber Eats.
Create A Budget And Live within your means.
Ultimately during challenging times you want to try and increase the gap between your expenses and your income. Having an awareness of what you are earning and what you are paying out is good practice for when things are difficult financially.
Learning how to budget is a great way of understanding what your expenses are (eg: food, energy bills, petrol, gym memberships or subscriptions) and will allow you to work out where you may be able to save some money eg: cancelling film subscriptions, reducing energy usage to lower bills, or planning meals to reduce your food costs.
Having better awareness of your finances will allow you to live within your means, ensuring that you avoid debt where possible, and increase your savings.
ugoscootersblog.com 
It’s seems impossible to avoid the word recession right now, with our feeds full of doom and gloom you are probably thinking how does a recession affect me?
The dreaded R-word can fill you with fear, uncertainty and a sense of impending doom. So this article will break things down, inform and update you on what happens during a recession and how it will affect you personally.
What Is A Recession?
During periods of economic certainty a countries economy grows, with peoples income rising as the value of goods and services (known as GDP) also rises.
Gross Domestic Product (GDP) is the measure of activity of companies, governments and individuals in a country, and is used as a tool to understand how the economy is doing.
However a bad sign for the economy is when GDP falls.
When a country is in recession the countries overall economic output declines, which leads to increases in unemployment rate, falling retail sales, businesses cut their spending and manufacturers produce less goods.
As I have previously mentioned when times are good, peoples income increases as the value of goods and services also rises. When this doesn’t happen people have less money to spend on things, which is why we see a fall in retail sales.
When retail sales drop, companies profits also drop and so they become less profitable. When this happens businesses will attempt to reduce the impact of less profits by making people redundant and increasing the cost of products and services to the customer.
How Does A Recession Affect Me?
You may find that during periods of recession that you are having to spend more on essentials such as food and petrol, as well as heating and electric. This will mean that you will have less disposable income to spend on things that you enjoy such as going out for dinner or enjoying a pint with friends at the pub.
During an economic downturn businesses look to cut costs, so you could find that you don’t have job security or that pay increase or promotion you were looking to get will not happen. If you are due to graduate university you may find that the number of graduate jobs are reduced as companies look to cut costs. If you want to recession proof your career read this article which outlines the best recession proof jobs experts say are in constant demand, even when the economy is not doing so well.
The cost of lending by banks will increase as well, so if you are looking to buy your first home, the cost of doing that will increase. If you rent a property and your fixed term is coming to an end, then it is possible your landlord may increase your rent to cover their cost increases.
What can I do to prepare for a recession?
A cushion of cash.
Having a cushion of cash during uncertain times can give you some much needed piece of mind.
Having 6-9 months of saving to cover your expenses such as your mortgage, energy bills and food experts say will allow you to survive in the event of losing your job.
Now, you maybe thinking how can I manage to save that amount of money when things are already tough?
If 6-9 months of saving is unrealistic you could consider one month to begin with, or rather focusing on saving a large sum of money all in one go just focus on small amounts daily. Ultimately the amount you save isn’t important but having a saving mindset will put you in good shape for the future.
Consider A Second Job.
If your unable to create an additional pot of savings you may want to consider a second job or start a side hustle to make money on the side, to support you current income.
The gig economy has provided many people with the opportunity to work flexibly around other work or family commitments.
Deliveroo and Uber Eats offer such opportunities which allow people to work when they want and choose how many hours they want to work. If this is something you may be interested in you may like to read this article which explain how much you can earn working for Uber Eats.
Create A Budget And Live within your means.
Ultimately during challenging times you want to try and increase the gap between your expenses and your income. Having an awareness of what you are earning and what you are paying out is good practice for when things are difficult financially.
Learning how to budget is a great way of understanding what your expenses are (eg: food, energy bills, petrol, gym memberships or subscriptions) and will allow you to work out where you may be able to save some money eg: cancelling film subscriptions, reducing energy usage to lower bills, or planning meals to reduce your food costs.
Having better awareness of your finances will allow you to live within your means, ensuring that you avoid debt where possible, and increase your savings.
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