If you feel the pinch of a tight economy, you are not alone. As layoffs climb, many Americans find themselves in a position where they need to find creative ways to make money.
According to Gallup, more than half of Americans worry about their finances today. To stay above water during turbulent times, you must recession-proof your income.
Making financial plans can be overwhelming, especially if you are unsure of how to begin. Here are five things you can do today to secure a more prosperous future.
You know the old proverb, "It is better to have it and not need it than need it and not have it?" Well, it's true.
If you have ever been in a situation where you needed money but didn't have it, you know how terrifying it is. We are talking about a whole new level of anxiety! You start worrying about what to do if your car breaks down, your dog gets sick, or your toilet breaks.
Life is full of ups and downs, and we need to prepare ourselves for the downs. Having an emergency fund can be an immense lifesaver when it comes to weathering a storm. We all need a pool of money that we can turn to in case something unexpected happens—like a job loss. The more you have saved up, the better!
Starting from scratch? Take a look at your recent spending habits and see what you can cut. It could be as simple as eating out less or reducing streaming services.
Budgeting is key for managing money. One of the biggest mistakes people make is not tracking what they spend. If you are unaware of where your money goes each month, it is impossible to create a budget.
Apps like Mint or You Need a Budget (YNAB) make it a breeze for people to track where their dollars are going without any bookkeeping software. They categorize the transactions for you, which helps identify areas to cut back on spending. Once you start budgeting, you will notice how much easier it is to save hundreds, if not thousands each year!
A great rule of thumb when it comes to managing monthly personal finances is the 50-30-20 Rule:
50% goes toward life necessities like housing, food, and bills.
30% goes toward "wants" like socializing with friends, leisure shopping, and travel (life is too short to not have fun sometimes).
20% goes toward savings (emergency fund and retirement fund).
Too many Americans put off retirement savings until it is too late. The truth is, there is no better time than now to start putting aside money for your golden years. The earlier you build your nest egg, the more time it has to grow.
So how much do you need to save? People in their 20s and 30s should strive for an emergency fund that covers three months' worth of living expenses. If you have more than that, you can invest 15% of your earnings into retirement savings. Those in their 40s and up should aim for 25%.
A side hustle is a small business you run on the side—and it is a must if you want to recession-proof your income. This looks different for everyone. For example, you could sell something online, start a freelancing business, or babysit. The website Band Pioneer has a great article listing some of the more popular ways to supplement your income, including e-commerce and affiliate marketing. But even many hobbies that people already do for fun can be repurposed for profit. The possibilities are endless!
There are countless benefits to having a side hustle:
Earn extra money to create a larger safety net.
Do what you love as long as there is a demand for it.
Enjoy freedom and flexibility, which is crucial for self-growth.
Stabilize your financial situation so if one goes down (like your main job), another one rises (your side hustle).
Diversify your skillset and experience.
Never get bored—there are so many side hustles to choose from!
These days, no one should rely on a sole income source. People are getting laid off left and right at their 9-5s. The best way to ensure financial security is to diversify your income streams. One way to do this is by investing in cryptocurrency!
You can invest as little or as much as you want, depending on your risk tolerance. There are a plethora of cryptocurrencies to choose from. Crypto is a fantastic long-term investment because it has a solid future ahead of it. Assets like $BTC are growing in popularity every day.
If you are brand new to the crypto scene, you may find it daunting to invest or trade without guidance. Joining a community of like-minded individuals with similar goals can be super helpful. At AR Collective, we are a family of budding and experienced traders. Find your place with us and begin an exciting and profitable journey.
The secret to recession-proofing your income is by staying ahead of the game. Don't wait until a storm comes—when it rains, it can rain hard! At a time when more people struggle to make ends meet, it is crucial to have options for supplementing your income.