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Beat the Recession – Don’t forget to live a little

Posted on 09. Feb, 2009 by Mike in Action Items

I was having a conversation with friends tonight who asked about our reduced spending and if we were going into full “clamp down” mode of if we were going to “live” a little.

I believe the action plan to survive and beat a recession (or any reduced spending situation) needs to be broken down into 5 basic steps or phases:

1) Expenses assessment
2) Income source assessment
3) Expense adjustment
4) Income sourcing
5) Long term plan

In order to keep stress levels as low as possible, it’s important to follow these steps. We need to assess our current expenses to determine which ones are unavoidable and which are frivolous. We need to look at every source of income in the house to see what is currently being utilized.

Next we need to see where the expenses can be reduced. This can be done in steps if you find yourself laid off and many expenses can be reduced in stages. If the condition worsens we simply make a call and reduce some more.

Income sourcing is next. All available sources of income need to be identified for a clear picture of what needs to be done and when.

The long term plan needs to cover the fact that the recession could go on longer than you think and also allow you see the need to make adjustments as you go.

The one easy to overlook point in all of this is the fact that you’ve still got to live a little. I mean, if the recession has taken your job, I don’t think buying a new Harley-Davidson is a great way to “live a little” but find a way to still take your sweetie to the movies or to get the kiddies a little treat.

Kids are going to be getting a whole other post…the small ones don’t even know we are in a recession. We must tread lightly on this subject to avoid overloading them with the doom and gloom.