What is recession?
The term recession refers to a period of temporary economic decline, during which trade and industrial activity are reduced, it is generally identified by a fall in GDP in two successive quarters. Recession always takes its toll on citizens of any country that is experiencing it at any given time. During this time, figures take center stage while the families dealing with the recession suffer, often quietly. People work hard just to stay afloat in hopes that the economy will turn around soon, but often to no avail. While many families do their best to carry on as if nothing is wrong with the world, recessions can have a profound effect on their day-to-day interactions and the way they live. Families may not be able to avoid the effects of the recession, but they can make changes that can improve their situations and help them prepare for the future, while they wait for an economic upswing.
Some effects of recession and how to cushion them: Jobs and employment
Job loss affects the stability of families and individuals. Status, self-worth, health, and well-being can be drastically impacted by the loss of a job. With unemployment rates running extremely high during a recession, individuals and families struggle to find work to pay the bills each month. The inability to find work can be frustrating, terrifying, and depressing, and can lead to even more problems. Instead of waiting for the perfect job to appear, consider taking a part-time job to bring in some income while working with a headhunter to find the right career. Going back to school for additional studies can also help with a job search. It might be time to transition to a new line of work. Choose new career paths wisely, based on the job market and the outlooks for great career fields. Moving to a new town for a job can open up new career opportunities as well. Relocating shouldn’t be seen as a last resort. In fact, being open to job opportunities in different areas can significantly widen a job search. Before you apply to your next job, make sure your resume stands out from the competition. Top Resume is offering free resume reviews where they will analyze your resume and give you personalized and actionable advice. Upload your resume to TopResume.
The stress of not finding work, and a loss of income, can lead to damaging inter-family relationships that can take years to mend. Sometimes families borrow money from relatives or friends, which can result in tense situations. Some families must change their plans, sell their homes, switch schools, and cancel vacations. In other households, there is even an unfortunate increase in child abuse cases.
Tips and Strategies:
Families can work together to cope with the changes brought on by an economic downswing. In fact, a recession may positively impact a family, as families tend to stay home together, and spend more time together. Instead of pricey nights out at restaurants, take the family to a local park for an evening picnic or have a cheap family game night. Look at the experience as an opportunity to spend more time with the children, and make the most of the time spent as a family.
Reduced income leads to reduced entertainment and extracurricular activity expenses. People cut back on extras during a recession, so many families must make drastic changes to their pre-recession lifestyle. This means fewer trips, shared experiences, and missed opportunities because of a lack of funds. The lifestyle changes brought about by a recession will include a period of adjustment. Families must allow themselves time to adapt, and understand that children may not fully understand the financial implications affecting the family. Talk with children about how things will change, and be realistic about expenditures and outcomes. It’s a great time to teach your kids about money management. Don’t build up expectations about what might change in the future. After a period of unemployment, belt-tightening may still be necessary, as the impacts of unemployment can be far-reaching. Instead, focus on changes that need to happen now, and how the family can make the best of the situation. Business Opportunities Entrepreneurs may have a lack of funds available for borrowing or starting new companies during a recession. Innovation often comes from the small business segment, but a lack of funding, coupled with a downturn in spending, may make small business owners nervous and unwilling to take big risks. For unemployed entrepreneurs looking to start a new venture, this lack of funding can really hamper their chances of success. This is likely not the right time to start a new business, and the business idea may need to be put on hold. Continue to research new ideas, and look for investors or business partners, but focus efforts on earning an immediate income to support the family