Do you think you can sustain your debt consolidation payments when the recession hits? If you think it is not possible, you are mistaken. You can sustain your payments as long as you prepare for it. Unless you are living under a rock this whole time, you should be able to get wind of news about an upcoming recession.
And if you had been paying attention, it seems like business leaders are starting to expect the next recession to happen soon – like the end of 2020. It is not like these people are pessimistic. They understand how the market and the economy evolves. No matter how hard we all work, it is a fact that the economy goes up and down. Since the last recession happened more than a decade ago, experts believe that we are ripe for another recession. It is not a matter of if, but more of when it will happen.
If experts are treating recessions as a part of life, then it means we should start taking it a little more seriously. That means we need to be prepared for it. And if you are currently making debt consolidation payments, you need to work double time to secure your finances. You want to be able to sustain your monthly payments while riding out the next recession. Because even if everyone is struggling financially, your creditors and lenders will still expect you to pay off what you owe.
How to continue debt consolidation payments before the recession hits
The truth is, the fact that you are making debt consolidation payments is already a good thing. Getting rid of your debts is one way to prepare yourself to survive a recession. While you are one step ahead because you are already in the midst of a debt relief program, that does not mean you should relax. There are still a lot of things that you should do if you want to ride out the coming recession unscathed. One of the things that you need to ensure is your ability to sustain debt consolidation payments.
Here are some of the things that you can do to prepare financially.
Keep paying your debts
First of all, do not panic. You need to keep on paying your debts even as you prepare for the inevitable recession. Although you are scrambling to make your finances more secure, you need to pay your bills as usual. As mentioned, just because a recession looms as a threat in the future, that does not mean you should ignore your debts.
Make a plan now
As you are paying off your debts, you need to come up with a plan. The goal is to lower your expenses so you have more than enough extra money. This money will be used to make your finances secure. You need to have a plan to accomplish this goal. You need to have a plan to save money. When you have a plan, it will make things easier to follow. It will direct your actions so you will always be one step closer to securing your finances for the looming financial threat.
Boost your emergency fund
After the recent federal government shutdown, it became apparent that a lot of people do not have enough savings. It was so bad that some people could not even afford to buy the necessary medicines that will keep their ailments at bay. Others were left with less than $50 to live on. If the recession happened this week, how do you think people will survive financially – much less sustain their debt consolidation payments? This is the reason why we should all have enough emergency funds. This is a cash amount that you have on hand for unexpected expenses. It may seem like you will not need it now but the truth is, it is an important strategy in keeping yourself financially secure.
Look for an alternate source of income
Finally, if you want to keep up with your debt payments, make sure that you have another source of income. This will ensure that even if you lose your job, there is still one source that can provide for what you need. It may not be enough but at least, you will not be left without some cash. You can opt to get a side gig and build it up to provide you with a stable source of extra income. Another option is to find some way to get some passive income. Rent out the extra room that you are not using. That can help add to your funds and help you prepare for the recession.
The bottom line is, if you can make your finances more secure, there is a higher chance that you can afford to sustain your debt consolidation payments.
How to financially survive a recession despite debt payments
Even if you have prepared everything to survive the upcoming recession, there are still some things that you need to do in order to ensure that your debt payments will be maintained. Nobody knows how long the effects of the recession will last. This is why you have to ensure that you can last for as long as you possibly can – without compromising your debt consolidation payments.
Live frugal life
Start by considering to live a frugal lifestyle. This is a type of lifestyle that prioritized payments. It is not meant to restrict your life. By knowing your priority expenses, you can limit your budget without compromising the necessities that will make your life worth living. You can start by creating a budget plan that will not just support your debt consolidation efforts – but will also help you lower your expenses significantly. Ideally, this bare-basic budget plan should be done before the recession takes place. That way, you know what to do immediately. You will know what needs to be sacrificed and what you have to focus on.
Come up with a backup plan
Apart from the frugal life, you might want to come up with a backup plan for the worst case scenario. This includes losing your job as a result of the recession. Obviously, losing your primary source of income will compromise your ability to meet debt consolidation payments. You need to have a plan in case this happens to you. What will you do? Will you downsize your lifestyle significantly? Or do you have another source of income that you can rely on? Think of the worst things that can happen to you during the recession and have a backup plan to deal with it.
Keep all sources of income up
If you are successful in opening new streams of income, you need to take very good care of these. It might be more of a challenge to do so when the recession hits. But that is what you have to overcome if you want to survive the recession and while sustaining your debt consolidation payments. Try to be more creative to earn more. You can even downsize your life significantly. Selling off some of your things can give your finances a boost – if only temporarily.
Stay away from debt
Finally, you have to make a commitment to stay away from debt if you can avoid it. Adding to your credit balance will just make things worse for you. So if you can help it, just lower your spending. Use cash to ensure that you will not overspend. The last thing you want to do is to increase your financial obligations. You need to lower your spending while the recession is still happening. Keep the frugal state of mind and it should give you insight on how to spend your limited resources.