Are you financially ready for (Recession) 2023?

Is a recession coming in 2023? The current market climate and past data show the US is expecting a recession; not only the US maybe it is going to be a worldwide economic slowdown. We have seen extensive downsizing throughout 2022, including big tech giants like Amazon, Meta, and Twitter. There are around 150K layoffs in 2022 per “layoffs.fyi”. So companies are doing their part to mitigate risk.

Being an individual, do we think about risk mitigation? We may have a different standard of living in 2023 as we see high inflation & growing interest rates. We should consider downsizing our living costs wherever possible and building the emergency fund.

Make a budget: Determine how much money you have coming in and going out each month. Look for areas where you can cut back on expenses.

Below are some of the significant areas of living cost.

• Housing (Rent, Mortgage, and Home Insurance)
• Transportation (Car loan payments, Car Insurance, other commute expenses)
• Food (Grocery & Restaurants)
• Entertainment (TV, tours)
• Miscellaneous (Electricity, phone, Internet & memberships, pharmacy)

Here are the ideas to reduce the cost of expenses.

Housing:

If you are renting and not on a lease, Look for a home or apartment that fits your budget and compare prices with similar properties in the area. Feel free to negotiate for a lower price.

If you are renting and on a lease, consider sharing a home or apartment with a roommate or multiple roommates to split the costs.

If you own a home and live alone, consider getting a roommate to split the cost of rent and utilities.

If you own a home and live with family, consider short-term rental so that you will not lose your privacy permanently and get flexibility. Check airbnb.com — a short rental site for homeowners.

One more thing, consider shopping for your home insurance and try to reduce it if you are overpaying.

Transportation:

If you own a car and not using it frequently, consider renting out the vehicle to cover your loan or for some extra cash. Check “turo.com” — a car-sharing marketplace.

If you have to drive, consider carpooling with coworkers or friends to reduce the cost of gas.

If you live in an area with reliable public transportation, consider using it instead of driving. Public transit is often less expensive than driving, primarily if you use a monthly pass.

If your destination is within a reasonable distance, consider biking or walking to save on gas and wear and tear on your vehicle.

Food:

The only way to save on food is to cook at home. Eating out can be expensive, and we must maintain the quality of the food, so try to cook at home as much as possible. You can save money by making meals in bulk and freezing leftovers for later.

Buying bulk can often be more cost-effective, especially for non-perishable items like grains, beans, and canned goods. So Costco is your best choice for non-perishable items. Look for coupons and discounts when shopping, and use cashback apps or credit cards that offer rewards.

Entertainment:

There are many ways to have fun without spending much money.

Free Events: Take advantage of free events in your community, or try activities like hiking, biking, or picnics.

Streaming memberships: Try to refrain from streaming memberships like Netflix and all. There is always youtube.com, and you can use the Tubi app for free movies. If it is not enough content for you, always get a combo membership like Amazon prime, which will come with free delivery and streaming service. Still, more is needed; share the memberships with friends and family to split the cost.

Movie theatres: If you want to visit a movie theatre for a new movie, always prepare to go on a discount day. For example, Cinemark provides Tuesday as a discount day for the film.

Vacations: Try to refrain from vacations during the recession. If you still want to go, it’s essential to carefully consider your budget and financial goals when planning a break and to look for ways to save money wherever possible. This could include finding deals and discounts, using coupons, and opting for cheaper accommodation or transportation options. By researching and being mindful of your budget, you can find a vacation that fits your needs and financial constraints.

Miscellaneous:

It is essential to revisit your miscellaneous expenses. Sometimes unknowingly, we have been spending on things that we stopped using.

Subscriptions: Most of the time, we have been getting yearly subscriptions to reduce the cost of it. Within a year, our usage might have been deprived. To avoid this, always try to get a monthly subscription and use it for a couple of months before you commit to yearly subscriptions. It is important to set a reminder for the subscription end date to revisit and cancel if it is not needed anymore. Auto-renewals are terrible ideas for any memberships or subscriptions.

Electricity & Gas: Nowadays, energy spending has become expensive. Energy companies are making strides towards limiting energy use, simplifying rate plans, and promoting clean energy. There has been about a 48% increase since Jan 2012 in the electric rates in the bay area where I live.

There are tier-based charges for energy, so you need to find out your peak and off-peak rates, which vary based on the season, like summer and winter. By saving energy, you are saving money and reducing your carbon footprint.

Here are some tips to save energy.

• Avoid using a washer and dryer in peak hours — mostly from 4 pm to 10 pm.
• Turn off your lights and computer monitors when they are not in use.
• Use LED light bulbs. LED light bulbs use less energy and last longer than traditional incandescent bulbs, saving you money on your energy bill.
• In Winter, Dress up appropriately to avoid running the heater all day.
• Use a programmable thermostat. A programmable thermostat can help you save energy by automatically adjusting your home’s temperature based on your schedule.

Phone & Internet: There are ways to reduce Internet & phone bills. Especially, data has become cheap, and if you are still using an old plan and paying high money, it is time to change it.

Nowadays, most of us move to work from home at least three days a week, and it is time for us to check our data usage. We may not need unlimited data anymore.

If you realize you do not require unlimited data, go by the gig and check your cost, which is cheaper and good for you.

If you realize you require unlimited data, try to club with your friends and family for group offers. For example, Xfinity mobile provides unlimited data for as low as $30 per line with two lines.

If you cannot club with anyone for a group offer, Try to get your phone and Internet from the same provider. It will be cheaper with a combo offer.

Pharmacy: If you are a frequent pharmacy user, there are options to save money. Only order your medication from nearby pharmacies if it is urgent. Otherwise, ask your doctor to send it to a “mail order” pharmacy, where you get three months’ supply for a lower deductible. Check with your insurance.

If you buy over-the-counter medication, compare the active ingredients with home brands. Home brands are always about 30% cheaper. You can get coupons from Goodrx.com for your prescriptions.\

Recession-proofing your lifestyle involves taking steps to protect your financial stability during times of economic downturn. Following these tips can increase your financial stability and better life in economic downturns.