RECESSION AHEAD: 5 Ways to Recession Proof Your Finances and Avoid a Financial Headache

So when everybody is talking about the next recession coming, a lot of people's ears perk up and they get scared and they start getting anxiety because they hear recession and they think about maybe the last ones that have happened. People losing their jobs, you losing your job, not having enough money, home foreclosures, home prices going down, the supplies not being there. They think of things that are scary and one of the things that I try to talk about is not putting yourself in a position where that is going to be as stressful. There were a group of people who were already embracing a certain type of lifestyle that when 2020 hit were not really as stressed as the other people. There were certain thoughts that went through their head, but as far as financially they felt very comfortable. So in today's video, given all the new news headlines happening, I want to talk to you about the basics of how you can easily live frugally and save more money. These concepts can help any and everybody if you take them in and you really digest them and start putting these little habits or these little nuggets of truth and thought into your everyday life. Some of this information may not be new to you, but maybe my take on it and my thought behind it will. And that first kind of thing that you should always think about is spending less than you make. It seems really simple and really easy, yet so many people overspend. They put things on credit cards, they buy things on payments. Where it is a simple concept, for some reason people still don't even stick to it or don't think about it or don't know how much money is actually going out the door. They just know they can't pay their bills every single month. If you are able to spend less than you make, you are going to be in a much better position if a recession does happen. If you are already overspending, then you are already spinning your wheels and not going anywhere. It doesn't mean living on beans and rice. Spending less does not mean that. It also means prioritizing what you spend in order to pay yourself first. You want to think about the things that matter to you and what your future might be because a lot of people, you know, you can't take it with you. Well, I'm sure there are a lot of people in their 70s or 80s who maybe have run out of money, didn't have money, were still having to work and are now no longer able to work that wish they had thought something other than, well, you can't take it with you. The life expectancy here in the U.S., I believe it's now at about 79 years old, so the likelihood of you living well past your workable age is happening. You have to really think about that. Inevitably, if something does happen to you early, then that is what it is, but the likelihood is it isn't. You're going to live, so you're going to need to have something to live on and not have to worry about depending upon others. The first overarching concept is spending less than you make. How do you do that? The first thing you have to do is determine how much you make, and the second thing you have to do is determine how much you're spending. Once you do a budget, there is a freedom in it, but people are so scared to actually look at the reality of how they've been acting, the reality of how they have been spending their money, looking at themselves in the mirror and having to say, you need to stop. One of the reasons my husband and I have been so successful is this next overarching piece of this frugal lifestyle, and that is not increasing your cost of living. How do you do that? There are some times, like with inflation, where your cost of living increases without doing it yourself, however, a lot of people do do it themselves. What happens here is people go through their life, from high school, college, first job, second job, third job, promotion, promotion, promotion, and as they go along, they keep getting these increases in pay. Again, not everybody, obviously, but as a generalization here, it's usually the way things would work. As they get these increases, or these bonuses, or these different jobs at a higher position, they notice that they're making more, and then they look back at their past W-2s and tax returns, gosh, I'm making a lot more than I was three, four years ago, but I don't feel like I have anything to show for it. Whereas if they actually looked around, they would see they have a bigger house, bigger mortgage payment, they have a luxury car, bigger lease payment, they have all these credit cards, all these nice shoes, all these nice clothes, that's where it went. They've increased their cost of living at the same or at a larger level than their income increased over the time. What you really have to think about is trying to stay right around where you always are. I always say, if you were doing okay and living before your raise, or your promotion, or the new job, and living great, comfortably here, then there should be no reason for you not to save the extra for a rainy day, because guess what, it always rains eventually. You need to bank your raises and unexpected money, refunds or any of that, reimbursements, bank that kind of stuff. The way I look at it is, if you've got $2,000 a month income, we're just going to use round numbers here, and you've got $2,000 worth of expenses, or let's go $2,000 a month income, $1,800 worth of expenses, and you are able to easily put $200 a month towards saving or paying off your mortgage extra, whatever that is, and you get a new job where you're making, bringing home $2,500 a month, your expenses are still $1,800, then why would it be necessary for you to spend that extra $500, unless you needed a bigger house, you had outgrown it, you needed to take that money and do something to your house, but that's kind of a savings thing. My recommendation is to you, is every time you get these increases, these bonuses, these pay raises, bank the difference first. If you didn't notice it was there already, then you're not going to notice that it's not there in the first place. The way I look at it is, I have a certain income, but my paycheck is my paycheck, so if I'm living on that paycheck and I get an extra bonus, I get a share of stock in something and I withdraw it, or I get a Christmas bonus or something, I'm just thinking mileage or whatever extra, there is a reason to go ahead and put that away. You can go ahead and put that away for something you're saving up for. If you want to pay cash for your next car, do so, but what more often happens to people who aren't conscious, is they automatically just think that is just more discretionary spending money each month and they haven't already reeled themselves in from buying so many of their wants versus just their needs. One of the more fun things about frugal living and saving more money is understanding that thrifting is for everyone. Everyone can enjoy getting something for a deal or a bargain. It is something that what you have to realize is there is a lot of stigma behind it and you might think that it's subpar stuff or it's used stuff or it has holes in it or stains or something. No. Think about the last time you got rid of things. Was it all junk? No. It was probably some good stuff in there, probably stuff that wasn't even half used. When thinking about thrifting, you've got to think that people have different changes in their life that happen, right? Kids have a ton of clothes or toys, don't use them all. Parents move from the house where they raised their family into a smaller house and need to get rid of the extra things because they're going from 3,000 square foot down to an empty nest or 1,400, 1,200 square foot so they can't bring all those things. Not everything that is thrifted is under that stigma. You could find a lot of really sweet deals out there and that's even just at your local Goodwill, that is at your local garage sales, that is also going on to your eBays and your Facebook marketplaces and just within your community area. Nobody is above a good deal. With that caveat, remember, and this is where a lot of frugal people fall into super frugal, always looking for a deal, but realize that they still spend a lot of money. I always say this one thing, somebody who says the day after Thanksgiving, oh, I got a TV for 750 bucks. It was $1,000, but I only spent 750 bucks. You still spent $750. If that wasn't planned or still wasn't the best deal, really did you get a deal or did you fall for a marketing scam? My point is being aware, and that's why I kind of on my channel talk about minimalism and simple living and how it ties into this and not meaning that you have to be a minimalist with your one chair and your mattress, no. The concepts of if you need to make sure the thing that you're buying, that you're thrifting, you're going to use it. You're going to need it. You need it. It's something you want really, really bad. You love it, and it has a home. Those decluttering principles that I've talked in other videos on, just making sure it's something you need, you love, and you will use, but you can really find some great things. I've also, on that same token, talked about people who just love sales. On this channel, I hear a lot of stories from people, and when I talk about what I even do on this channel, I hear a lot of stories from people. You have to really step back and not spend your entire time or life on those Craigslist, Facebook marketplaces because it's just as if you were walking through a mall. It's the same thing. You're going to get the same trigger. You've really got to, when you're looking for something, let's say you want a new dining room table, that's when you go and you start looking at those pages. You don't just check them every morning when you wake up. That is where you can get into trouble with that. With a frugal person and trying to save more money, this one is hard for people. This one is where we didn't have access, quick access to everything that we do now. The access we have and how quickly we can get things, maybe not as much as a couple years ago, but it's still ridiculous as opposed to years ago. Wait and think can be your best ways to curtail frivolous, unintentional purchases. It's one of the foundations, and I think a lot of the things I'm talking about here are just foundations of frugal living. Giving yourself a time frame, a time limit. I say here that you are an adult and with that comes freedoms, but also sometimes you have to keep yourself in check. Whereas when you were a kid and you wanted to have a Diet Coke and ice cream with cookies for breakfast and your mom would say, no, that's not healthy, you can do so as an adult. It wasn't a good idea though as a kid and it's probably not a good idea as an adult because you're going to get hungry real quick. You're going to have a slump, there's going to be a sugar high and then down and you're not going to be full. You're going to end up eating more. It's still not good for you, right? You have to be the parent to yourself. You have to visualize yourself outside of yourself and say, what is the best decision for me? What is the best decision for Jennifer? One way to do that is putting these little self-imposed rules in place. Wait and think. Give yourself a curfew, meaning don't shop after 7 p.m. If you find something after 7 p.m., you can't purchase until 24 hours later. Giving yourself that timer. The timer is the other one. As I talked about that, give yourself a curfew. Can't purchase anything on Saturdays or I can't purchase anything on Monday morning or I can't purchase anything after 7 or I can't purchase anything over a certain amount within 24 hours. These can be just fun things. It's the same thing as if you would say, I don't eat dinner after 7 p.m. because it just gives me indigestion and I can't go to sleep. Go ahead and add into that. I can't purchase anything when I'm in my almost sleep state, going through Instagram and am triggered by something that I see that I absolutely need. Nope. Sorry. Can't eat dinner after 7 p.m. Can't go shopping after 7 p.m. Use this time also to do the research. Is there another option? Can I, rather than buying the wheelbarrow, borrow it from my neighbor? What are the reviews on this? I can tell you I have saved so much money, so much time, and so much effort by just clearly reading the reviews on something. Is there something better that costs less or can I get the same thing somewhere else? I find it a game when I decide that I want to buy something, seeing is it the quality is ... Let's say I want to buy one thing, but there's 10 choices. You're on Amazon. You're finding the one, the best review, and then maybe you decide to take that description of what it is, put it in a Google search bar, and see if you can get it somewhere for less. Giving yourself that time puts again that resistance, helps you be more parental toward yourself, and also gives you time to research and see if there is a better option or another way to go about it. Living frugally and saving more money. What are some ways to jumpstart that? This is new for you. You're trying it out. You want to see how it works, how you can almost break a habit. The way that I talk about this is to lock up the money. This is one of my favorite things. No spend challenges. I'm not talking cold turkey. I'm not talking about ... For example, you're a meat eater. You eat ham and eggs for breakfast. You eat grilled chicken, salmon, or some other fish for lunch. You always have a big old hunk of red meat for dinner, and then the next week you're going to go raw vegetable diet. Let's just say that's going to fail. It is going to fail 99.99% of the time, right? It's the same thing with trying to do some sort of crazy huge no spend challenge, or putting yourself on the strictest budget. It would be the same as if going from eating 2,000 calories a day to try to surviving on, I don't know, 1,000 calories a day. You have to start out small to give yourself those small wins. Locking up the money is a great way to start out with this frugal lifestyle, again, but in small steps. You're going to start with maybe no coffee for a week, no donuts, no mall trip. You limit yourself to maybe at two weeks or even one month. After you've done that, you'll start seeing results and resistance to other things. It will snowball and it will create a bigger habit change. It gives you the opportunity to change a habit one small thing at a time, doing the lock up the money challenge. There are so many of these money challenges on Pinterest, on YouTube that you can use, but I just encourage you to find one that works for you. Maybe find the most frivolous thing that you do. I'm not saying don't buy your coffee. That's one of the things within frugal living. They say don't buy your coffee, don't do this. I'm not ever a proponent of not doing things that you love or things that you enjoy. If it's something you absolutely love and it's within your budget and you cut it out and it really does make you happy, then that's not going to help you. It's just going to make you frustrated and give up more easily. I'm talking it's something that is something you do. For instance, instead of going out to eat, going out to eat during the week, meal planning so that you have meals you can heat up is a great thing to do and start. That is one thing that eating out every single day probably isn't making you all that happy because it's a lot of money. It's stress and time to go out and get the food. The food doesn't always taste that great. You're waiting in line and it's not the best healthy food for you, meaning it doesn't give you the most energy. Just realize, find those things that you do that you spend money on just because you don't want to take time, not because they're things that you just absolutely enjoy and start out with those items. If you have been frugal for a long time and somebody new is seeing this channel, they're trying to embrace this kind of a thought process or lifestyle, what advice would you give to them? I would love for you to put that down in the comments below. If you enjoyed this video, as always, please click on the like button and subscribe to my channel. Both of those really do help me out and I always appreciate your support.