According to the National Bureau of Economic Research, the last recession began in December 2007 and ended in June 2009. Lasting a total of 19 months. We all know now how that short amount of time changed our lives and of those around us. Sadly, most lives were changed for the worse with houses, jobs, and savings lost in the blink-of-an-eye. This Recession Prep Guide for Moms is meant to get you ready for if another one hits. The goal is to have your family feel the least amount of impact as possible.
For some of the younger millennial generation, this was a time of life where you might have still been in college. Perhaps you weren’t affected directly with a home or job loss, but chances are your parents and/or other loved ones were. You saw the turmoil it caused and if it did directly hit you, there were probably some major lessons you learned afterward.
As we come upon a teeter-totter recessions prediction, it’s a lot scarier to think of going through one with kids. It’s one thing to go through it on your own, maybe have a few weeks full of Ramen and pasta dishes and cut down on living expenses. But when you have a child, that thought does not sit well at all. Now that I have been through a recession and know what it takes to come out strong, I want to share a prep guide. For you fellow moms, I hope it eases the stress of the possibility of one hitting again. If we are prepared for it, the family will be able to withstand any chances of money loss.
Low Hanging Fruit
So let’s get into it! There is a lot of advice out there that is business-related but this is a Mom-focused guide. There are four main aspects to getting the family in a good position. You want to be ready for anything that may come your way with a recession.
Most of us have those little credit cards or small loans that we pay the minimum balance on every month. The interest might be high and we figure they are no big deal so they just get the easy $21.00 payment. Truth is that the longer you draw those payments out, the more you are paying for that TV you bought at BestBuy two years ago. What I’m saying is debt like this is the low hanging fruit. It’s the easiest to knock down and decrease your debt. Even if it’s a small amount of money and seems harmless, if a recession hits – you’re going to want that paid off.
Here’s How to Do it…
Make a list of all of your debts with a balance under $2000 each. List them from lowest to highest. Call the customer service line for each of your debts. Ask what the actual pay off would be in one month, 3 months, and 6 months. Note these numbers and fit them into your new budget plan. See what it would take to pay them off within those time frames.
If you have any liquid cash right now, keep that number in the back of your head. If the cash you have is remotely close to the payoff amount, see if you can negotiate to pay off the debt with a number below the amount of liquid cash you have.
For example: Let’s say you have $700 left on a card and the payoff is $720 by next month. You have $500 extra liquid cash right now, you would ask if you could pay off the card today and offer $420. They might say they need more, and you can negotiate up towards $500 if needed. Chances are they will take it. And right there, you save yourself a few hundred dollars with all of the high interest you would have been paying on for years to come!
Do this as you go down your list. As you get closer to the higher debts, call to see if you can lower your interest rate or lower your payments by refinancing the loan. This way if you can’t pay them off by the time a recession hits, you’ll be prepared with smaller payments. If one doesn’t hit, you can continue paying extra to get them paid off quicker.
Cut. It. Out.
When you are not thinking about a recession, it is easy to throw the extra little items in the cart at Target. That cute little box of stationery, even though you have 400 thank you cards at home…or that pretty spatula set with the pastel handles, even though you have perfectly fine spatulas in the kitchen. We’re all guilty of it. But when you’re feeling a recession is coming on, it’s important to remember that the unnecessary spending is going to have to stop. Nothing is forever, recessions pass and you’ll be able to buy those spatulas eventually!
Another thing to look at are those random payments that come out of your account monthly. Maybe you signed up for a couple of channels that are $4.99 each and you rarely watch them. What about that box subscription you signed up for a few months ago that you’re not crazy about for $29.95? Cancel it! Right there you’re cutting out $480 for the year of unnecessary spending. Look through your account and see what you don’t absolutely need in your life. Start putting that money into savings. You’ll be amazed at how it will add up! It will also make you more conscious of to not add silly costs to your monthly budget.
You know you have it. Every Mom has it. It’s that feeling in your gut on an errand day and they ask for ‘just one toy’ as you pass the isle to go grab the last thing on your list. They’ve been super good today but the truth is…THEY HAVE ENOUGH TOYS. The guilty feeling sets in and you have to say in your sweetest voice, “no sweetie, not today”. And you hate saying that.
I know the feeling well, we want to give everything to our kids. It’s a natural and sometimes even hormonal drive to take care of our little ones and give them what they ask for. Saying no and chancing the melt-down is scary and stressful for us moms. But at the end of the day, saying no to extra toys allows us to teach our children that material things are not always what brings happiness. Instead of rewarding our kids with a toy every time they do something right or well, how about trying a sticker chart? When they complete the sticker chart, they get a new toy. You save on toy purchases and your kids gain confidence knowing they are working towards a goal.
Saying no to unnecessary kid-related items also keeps our space free of clutter. Otherwise, it can pile up quickly and turn our home into a warzone. Clutter doesn’t only bother us, it overwhelms the kiddos, too! Have you ever gone to buy mustard at Costco? There are like 80 mustards, it takes you forever to figure out which mustard you want to get! Versus Trader Joes, there are about 5 choices – you grab the regular one and throw it in the cart as you walk by. It’s the same with toys, it can easily cause over-stimulus for children if they have too many options. Keeping toys to a minimum helps their developmental stages and allows them to learn to focus.
Sometimes Less if More
As a recession gets closer, it will be easier for your kids to understand that not having a bunch of toys is normal. They won’t feel a difference if you have to continue to cut back on toys for a while. And lastly, let’s be real, toys are freaking expensive! Usually starting around 20 to 30 bucks, we can average anywhere from $200 to $300 per month on new toys. If we can settle on one new toy every two weeks, we’re going from about $3000 a year to around $800 a year. You can always save those big-ticket items for Grandma and Grandpa to buy for birthdays and holidays!
Don’t Believe “Nothing is Free”
Prepping for a recession doesn’t mean that all fun goes out the window! When you have a kid, you know that simple things can make the best memories. Start by learning more about your town and exploring the history of it. Sometimes when we live somewhere for a while, we get used to our usual spots and stay in our neighborhood bubble. Kids love learning so if you can fit a free thing to go see in with some history lessons, it’s a win-win! See if there is a ghost town to go explore outside your area or a cool monument to visit.
Another idea is to go explore the outdoors. Camping with kids can be a bit much sometimes but there are a ton of free day-camping spots. You can still set up a fire, make some s’mores, and play fun camping games. Then jump in the car to drive back home for a nice nights sleep in your own bed! You would be surprised at how many day camping spots there are once you start looking!
Get creative with your activities! It’s okay to exchange the expensive zoo and aquarium trips for a day outside finding bugs under rocks. You and your kids will get a better bonding experience by removing the crowds of screaming children and stroller trains.
Don’t Freak Out
Not really part of the Prep for Recession Guide – but it’s important to note. A recession may or may not happen. Some say it’s inevitable and other outlets say we are at the lowest unemployment rate since 1969 with no recession in sight. It’s all about what you follow and who you trust, but either way, these steps will take you to a less stressful life. This guide will lead your family to be in a position that is better off if one does or doesn’t hit. Above all things, remember that you will bounce back if one does. I hope this guide helps ease any worries you might have been feeling with all the uncertainty going on right now!