10 ways to survive in a recession

This is a guest post from Kevin Mercadante who runs OutOfYourRut.com, a website focused on micro strategies for surviving in the current economy. Kevin is also the author of Lighten Your Load: Living Well On Less, an e-book focused on reducing living expenses while still maintaining a comfortable lifestyle.

In different ways it’s been said that it isn’t events, but our response to them that result in the biggest changes in our lives. Rather than attempt to analyze the forces behind the trends above or attempt to predict what direction they might take in the future, perhaps it’s best to take a more practical approach, and focus instead on answering the more relevant question, “What is our response?”

“A prudent man sees danger and takes refuge, but the simple keep going and suffer for it.” —Proverbs 22:3

One of the worst parts of recessions and economic downturns is that they can shake our equilibriums and force us into a state of confusion. Once the cash flow from a business or paycheck disappears, panic is a natural result. A state of panic is hardly fertile ground from which to hatch new plans in life, and that only adds to the confusion. If this describes your current circumstances, here are a few suggestions that might provide the foundation for a viable plan or at least shore up the one you already have:

1. Assume perpetual economic instability.

You can’t go wrong with this. If that assumption turns out to be wrong I’m sure you’ll have no trouble adjusting! Otherwise, actively network your business or your job skills continuously. You can never know when the next job eliminated might be yours. Be ready.

2. Move outside your comfort zone.

Network outside your career orbit; you never know where the next opportunity may come from, or who might assist you in getting there. Pigeonholing yourself into a single job or industry may prove to be a strategic miscalculation in the future.

3. Improve your repertoire of skills constantly.

The better you are at what you do the more valuable you will be to your employer. The improvement can also be in preparation for future endeavors. It’s never a bad idea to have a skill or skill set which is totally unrelated to your primary employment. Hint: if it’s something you like to do, it may not even feel like work.

4. Consider a career change.

This is especially true if you’re in a declining industry. If the end is certain, take action sooner rather than later. Don’t hang on trying to be the last man standing. It’ll be painful no matter when you do it, but always try to operate on your own terms and in your own time, not on someone else’s.

5. Be prepared to cultivate and balance multiple income sources.

You may have a full time job and a part time business, or vice versa. Think of your work in terms of an investment portfolio, in which diversification adds strength. There are probably several jobs you are potentially good at; always be on the lookout for new opportunities.

6. Be flexible in your plans and ready to adapt to changing circumstances.

If your job is eliminated, offer to contract or to work part time for the same company. If you develop multiple income streams, a shift to a part time arrangement may be to your advantage on a number of fronts. Be prepared to convert a negative development into an opportunity.

7. Reduce your cost of living.

What ever level you’re at, this effort will be crucial in the years ahead, much more so than it’s been in the past. Don’t assume a quick return to the easy money debt of the recent past will once again make thrift unnecessary. That thinking is a huge part of how the economy landed where it is now.

8. Accumulate savings. Make it a lifetime activity.

This is the best insurance you can have against sudden income disruptions. At the risk of being redundant, you will need to lower your cost of living in order to do this.

9. Envision a future without debt, and then pursue it.

Gradually pay down—then pay off—your debt. This includes your mortgage. It should go without saying that lowering your cost of living will be a crucial element in this effort as well. (Are you noticing a pattern?)

10. Seek fulfillment beyond your work.

In a world where careers are no longer either peaceful or progressive, self actualizing through your work may not be the path it’s been in the past. Fortunately, there are plenty of opportunities to find fulfillment outside of work. Take more active roles in regard to your health, family, faith and community.

Summing it up

These ten steps will help you survive and keep you on course no matter what the current talk in the news media may be, good or bad. You need no special skills to accomplish any of them; all that’s needed is a willingness to stick to it. Ultimately, the state of the economy is less important to you than the course of action you use to deal with it.

What actions have you taken to survive the recession?