It is not uncommon for the economy to be in a period of turmoil, such as during a recession. It has been years since the last economic downturn. Because it has been so long since many people have seen these worse days, we need to prepare ourselves in case this dreaded scenario ever happens again.
Mark Hauser, a private equity expert, says that consumers need to prepare now so that they can avoid making emotion-based decisions down the line, when things are financially tough. Mark says that many investors and consumers make impulsive decisions that end up costing them in the long run.
Mistakes to Avoid During an Economic Downturn
Mark Hauser explains the following mistakes that you need to avoid when an economic downturn happens:
- Incurring additional fixed expenses
Consumers need to avoid moving to high-rent houses, adding subscription charges to their cable or satellite services and signing up for expensive mobile phone contracts or other services that only become more expensive when the economy is down.
- Neglecting to have an emergency fund
Mark says that consumers should have an emergency fund in the event of an unexpected expense requiring financial assistance.
- Tying yourself to more debt
Consumers should avoid taking on debt, whether it be credit card debt or a car loan. When the economy is down, many people cannot repay their debts and end up filing for bankruptcy.
You should also avoid co-signing a person’s loan, whether your friend or family member. You must realize that their financial situation could change and they may not be able to pay back their debt, causing you to be financially responsible for it.
- Not having a secondary income stream
Stop assuming that your job will always be secured. The economy could worsen and layoffs and downsizing might occur. It is important to find a second job to help you make ends meet.
Mark Hauser says that if you avoid these four mistakes, you will be on the right track to surviving a potential recession. You will have the means to support yourself and your family, even if things don’t go as planned.
Connect Mark Hauser at professional network: http://Linkedin.com/in/mark-j-hauser