“To be prepared is half the victory.”
—Miguel de Cervantes
Inflation? Recession? What Happens?
Supposedly, when the economy overheats, when demand is faster than the supply side can satisfy, when the unemployment rate falls to 5% or lower, when companies have to bid up wages causing the price of goods and services to increase, that’s when the Federal Reserve starts raising interest rates to hopefully stop the spiral of inflation from getting out of control. And that’s when, supposedly, the economy can go into a recession.
It’s been said that recessions are “synonymous with economic pain felt by businesses and consumers alike.” Businesses may have less business and consumers may have fewer jobs.
What’s a Home Manager to Do?
For a home manager, whether you’re dealing with inflation or a recession, the goal is still the same: You have a certain amount of resources that you need to cleverly manage to take good care of yourself and your family. With inflation, your money buys less than it used to. With a recession, you may not have as much money at all. Either way, you still need to manage your resources…resourcefully.
So how should you be managing your resources now to handle a possible recession later?
In the same way you should be handling your resources all the time!
Five Dos and Don’ts
- Don’t panic. As soon as you panic, you can’t think. And if you can’t think decently, then your ability to come up with creative ways to solve problems goes right out the window. Instead of feeling nervous and afraid, try to look at this as an opportunity to get very creative in your ability to make the best use of every resource you have. You may be surprised at how much fun it is to figure out new ways to accomplish your resource management goals.
- Do save money into an emergency fund. I know we get told this a lot, but it makes a difference to know that you have a buffer between you and disaster. Buffers give you breathing room to plan. And who doesn’t like to breathe? It’s the financial equivalent of always having at least half a tank of gas in your car or a few months’ supply of food in your pantry. Buffers are beautiful. We love buffers.
- Do live below your means. Do everything you can to spend less than you earn and don’t waste money on things of little or no value. Know the difference between needs and wants. After all, you can’t build up that lovely financial emergency fund if you’re running on emotion instead of goals and impulsively spending your money in all the wrong places for all the wrong reasons.
- Do create and follow a budget. It’s been said that there is no excellence without measurement. If you want to be a clever and successful home resource manager, then you need to know (not guess) what you’re doing with your money. You can’t do that without a budget. Period. I’ve used the free version of Dave Ramsey’s EveryDollar budget tracker for years. There are other options out there. Find what works best for you and then use it. Tracking and seeing where you actually spend your money will inspire you to find better ways to use it. Money management is a game. Win the game.
- Do gain more knowledge, skills, and abilities. Remember, home management is really about resource management. And to a smart home manager, EVERYTHING is a resource…especially you. Investing in and improving your own home resource management skills will help you improve everything else.
Remember…
It doesn’t matter whether you’re dealing with inflation, a recession, or normal life. As a home resource manager, the goal is still the same…to manage all of your resources in such a way that you and your family can survive and thrive no matter what’s going on in the world.
