As indications grow that Canada could be headed for a recession and Canadians are advised we will ‘get through’ 2023 if we stick together, we look at the top three resolutions you could make to help you manage any uncertainty this coming year.
While recessions are challenging times for many, they are also part of the normal business cycle, across the world. If you are prepared, you can both remain financially stable and even gain opportunities to build wealth.
Reassess your expenses and increase savings where possible
Of course, January is always a good time to take a good look at budgeting and ensure there are no obvious areas of waste or unnecessary spending.
Building up your emergency fund will prepare you to tackle future expenses that are not already part of your monthly budget, including additional costs such as a lay off within the family or other unexpected events like a hike in food or gas prices. Also, evaluate your insurance providers and any forgotten subscriptions and be sure you are getting value for money.
Consider a side hustle!
Some of the most creative, successful entrepreneurs emerged out of a recession, whether due to a new invention or bright idea, or just tapping into the public psyche faster and more nimbly than large industries.
We are all capable of looking for new ways to increase our income, perhaps through selling our unwanted things via online selling sites, or turning a much loved craft into an artisan business.
Remember, whilst it is generally accepted wisdom for people to cut back on luxuries during a recession, it certainly does not mean they only buy what is strictly necessary. An economic theory known as ‘the lipstick index’ argues that sales of cosmetics will always rise during bad times because of their status as a relatively affordable luxury.
Such thinking can even be applied to any existing investment portfolio; companies providing basic necessities or cater to lower cost spending such as DIY and home
improvement are often considered more ‘recession proof’ than others. So, perhaps your ‘side hustle’ may not be a business but a careful focus or diversification of your holdings!
Make what you invest in work for you (and others!)
Chances are that if you do not need to move house, then you probably will not choose to do so right now. No one wants to have their family home undervalued, so why not stay put and make your home work its hardest for you. Ensure that if you do spend on your home it is on things that will benefit future buyers too.
A great example of this is purchasing a Stiltz Home Elevator; which can add value to your home, whilst future proofing it such that you know that even if mobility becomes a challenge you can continue to enjoy the full space within the home.
Thus, by investing in a residential elevator is always a sensible investment, one that for many comes with an instant realisation that it has hugely enhancing their home lives.
Experts in anything real estate will tell you to invest with a 10-year outlook when it comes to anything involving stocks or real estate in uncertain times and you and your family could be enjoying many years of comfort in your current home with the added luxury of a home lift to benefit from.