Recessions are bad for nations. Recessions are bad for companies, and recessions can be bad for individuals and families. Too many people, however, feel that they have no control or even influence over their finances during a recession. They adopt a "victim" posture and rely on good luck or the actions of others to get them through a down economy. This is a mistake. The way to survive a recession is to be strategically proactive, hard-working, and versatile.
Become Proactive and Not Passive
The first step to take in protecting oneself during a tough economy is to be proactive and not reactive. Passivity will lead one into victimhood and trouble.
There is a mindset in the western world, and it goes something like this:
- Go to high school
- If possible, go to college
- Get a good job with benefits
- Work your way up in that job -- relying on that company to "take care of you"
- If something goes wrong, collect unemployment and look for another job
- If necessary, go back and get more education
- Get a good job with benefits
- ....and on from there
This mindset must be replaced. While loyalty is commendable, it needs to work both ways. The economic reality, though, is that the economy is more dynamic and turbulent than in years past. The mid-20th century model of working for a single company for 30-40 years has largely faded.
The 21st century economy is now global, fast-moving, and numbers-driven. Rather than rebel against this (as many do), it's better to study the economy, understand it, and then strategically adapt to it.
Multiple Streams of Income
Robert Allen popularized the phrase "multiple streams of income" during the 1990s, and it's a phrase that fits here. Prosperous families do not rely on a single paycheck to make ends meet. They diversify their income through investments, part-time jobs, home-based businesses, etc.
Individuals today can adopt the "multiple streams" model on either a grand scale or a small scale. It boils down to not putting all the eggs in one basket. A person should not think of himself as an employee to a single company, but rather as an entrepreneur looking to maximize income. This isn't a license to steal time from one's boss. But it does mean that time outside of one's job can be better spent than watching Seinfeld reruns or the latest episode of 24.
There are many money-making ideas available on the Internet or even at a local library. However, a person strapped for ideas on how to add to his or her income should consider the following possibilities:
- Offer to rake leaves, mow lawns, or shovel snow in the neighborhood
- Offer graphic design, website development, telemarketing, or secretarial services to local businesses
- Offer to babysit or elder sit
- Offer to run errands for senior citizens
Of course, one should also look for ways to save money. So long as more money is coming into a family or individual than is going out, then things are okay -- at least financially speaking.
The bottom line is that a person need not play the role of victim during a bad economy. Through hard work, self-discipline, creative thinking, and a sound plan, an individual or family can beat a recession.
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