According to the Bank of England, UK faces 30% chance of financial recession in the year 2020. Financial recession has been experienced numerous times with the last recession happening in 2008. My goal is not to predict the next financial crisis but going by the statistics given by financial experts, 2020 is likely to be another year of recession. Everyone should be aware that this is the best time to make investments and brace against the shocks of 2020 financial crisis. As Warren buffet says, “Be careful when others are greedy, and greedy when others are fearful.”
Review Your Biggest Assets
If you are planning to down-size your family home in a few years’ time, or sell a real estate investment, do it before the year 2019 ends. You will not be selling just to be grateful for the money, but because big ticket items fetch higher prices in the market when times are good; just before the recession. During financial crisis, investment markets do not just slump, they vanish.
Cut Your Expenses
Living below your means temporarily might be a great way to save as much as you can before 2020. Do you really need Netflix premium, Hulu, Amazon prime, and gym classes you never attend? Be wise! As we lean on the last phase of 2019, you should start taking meaningful glances on your finances and stop unnecessary expenses. Start funnelling the little you save from various sources like ISA allowance as you prepare financially for the year 2020.
Shore Up Your Emergency Fund
According to financial experts, one should have set aside at least up to six months of living cost and expenditures in preparation for a rainy day. However, boosting your emergency fund may be a hard drag on the long-term investments you intend to make and your hopes of retirement. Try to keep your investment portfolio liquid and balanced so that you can cash out some money into your emergency account. Any access to extra cash should be saved.
Refine Your Budget Plan
We have all made financial budget plans and based them on lose commitments in several occasions. However, with financial recession being anticipated in 2020, it’s time to zoom in on your spending and savings habits carefully. Don’t use estimated numbers when reviewing your budget. Try to be specific as you can and use the cheaper alternatives. Lowering your fixed expenses may not be easy but focusing on variable expenses will indicate a great progress the next time you check your bank statement.
Create New Sources of Income
With modern technology on your phone and internet making it easier to have a semi-passive income through drop shipping, blogs, and social media marketing, getting a side hustle has never been this easy. Young people stand better chances to create passive incomes than elders. With time and energy, creating other sources to compliment your main job income will be a great security towards 2020.