Here’s how to save your finances when there is a recession storm

KOMPAS.com – Recession is in sight. That’s what the experts predict. Indonesia has great potential to enter into a chasm recession (significant economic decline).

A country is said to be a recession, when its economic growth contracts or is minus in two consecutive quarters. How about Indonesia?

The Indonesian economy still grew positively in the first quarter of 2020 by 2.97 percent. But it fell in the second quarter, namely minus 5.3 percent. And in the third quarter, it is predicted to contract again, although not as bad as the previous quarter. The projection is minus 2 percent, according to the Minister of Finance, Sri Mulyani Indrawati.

Also read: Here’s How to Invest to Stay Profitable Even though the Republic of Indonesia is Recession

From the Secretariat’s website, President Joko Widodo (Jokowi) in a recent limited meeting also said that if economic growth in the third quarter returns to minus, it means that Indonesia is entering an economic recession.

If Indonesia is hit by a recession storm, the people will definitely feel the bad impact. There was a bigger wave of layoffs (layoffs). The poverty rate will also increase.

If a lot of people get laid off, they automatically have no income or salary anymore. Purchasing power has decreased. Then brake on shopping. In fact, Indonesia’s relatively high economic growth has been supported by household consumption.

You must respond to this difficult situation with smart steps, especially when it comes to finances. Here are things you can do to deal with a recession, as quoted Cermati.com.

Keep calm

Once hit by the recession, many people panicked. Worried about their financial condition, including you. On the one hand, it’s natural, because during a recession, it’s hard to do anything. Looking for hard work, expensive basic needs, slow business. Meanwhile, the kitchen must remain hot.

Actually, if you panic, you can’t even focus on facing these times of financial famine. So keep thinking positive and keep trying so that you can survive in the midst of a recession.

Recession is not the end of everything. The government will certainly do various ways to rise from this downturn. So that the economy returns to normal, and people can live more prosperously.

Learn to live concerned and fasten your belt

When a recession hits, living frugally will be able to save your finances. Tighten spending. Prioritize your money only to buy urgent basic necessities.

For example eating and drinking, vitamins to maintain endurance, internet quota for school or working from home, paying electricity and water bills, and paying debt installments.

Refrain from spending wishes that can still be postponed. Cut unnecessary expenses, divert to savings or for emergency funds.

In these situations, it is very important to have a savings or an emergency fund. Because we all will never know how long the recession will end.

Pay off debt

You can also use savings funds to pay off debt. If you have more than one debt, prioritize paying off debts that are due. Or debt with the highest interest.

That way, in times of recession, the debt burden in your finances is not too heavy. I wish I only had one debt. So you can be free from debt.

In the future, your income will only be used to meet basic needs, not to pay debt installments.

Also Read: Without realizing it, these 5 wasteful habits are often done by young people

Avoid new debt

Times are hard, don’t look for things by taking on new debt. Whether it’s to a bank, a loan to a friend, or an online loan. Moreover, this new debt is used to pay off the old debt.

Avoid this if you don’t want to get into financial problems. It’s better for you to save money to pay off old debt installments, rather than submitting new debt.

Vacation at home alone

Recession is not the time for traveling, wasting money. Even though you already have savings for the holidays, it’s better to save the money for more important needs. Or just in case something unwanted happens at any time.

After all, you might end up spending a bigger budget. Especially for those of you who want to vacation abroad. The US dollar is rising, the rupiah exchange rate is weakening. The cost of your trip is guaranteed to be inflated.

Moreover, the Covid-19 pandemic has not ended. PSBB is still running. So, just vacation at home first. Do fun and fun activities, such as cooking your favorite food, gardening, playing video games, watching your favorite Korean Drama, or cleaning the house.

Later when things are normal again, rearrange your vacation plans out of town or abroad. Then make it happen.

Investing or looking for additional income

During a recession, don’t be silent. Increase your coffers of money by investing. Look for investment products that are ‘immune’ to recession, such as gold bullion, short-term government bonds (SUN), and deposits.

Gold investment is very suitable in times of recession, because it is easy to cash in. This means that it is easy to sell if one day you need fresh funds. Investment is a surefire way to save, even “double” your money.

If you don’t have money for investment, you can look for additional income. Sell ​​skills and expertise between your time. For example, after work or on holidays, receiving photography services, writing, or other productive side jobs.

Recession Isn’t To Be Feared

Recession is hard to avoid, but not to be feared. It’s not easy, but if you prepare yourself to face it, your financial condition will remain stable. Trust that the Covid-19 storm and recession will pass.

This article is the result of collaboration between Kompas.com and Cermati.com. The contents of the article are the sole responsibility of Cermati.com

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