Budget Lexicon

Tips for living a fabulous life on a budget

Saving Money Tip – What Does Recession Mean To You? April 28, 2008

Filed under: saving money tips — budgetlexicon @ 1:01 am
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Technically, we’re not in a recession yet, but we are definitely heading there. As young women in our twenties without families or mortgages, we wonder whether the recession really effects us?

Not to be a barer of bad news, but the answer is yes. Gas and food prices have been skyrocketing, job layoffs are on the rise, and more renters are being displaced because leasing companies have been losing their buildings (mortgages do not only effect home owners).

Okay, now that I have scared you, please take a step back from the ledge and remember the best defense is a good offense. The best offense for recession is to have 3-6 months of savings in a high yield savings account. This savings can protect you if you lose your job, are forced to move, etc.

If you do not have any savings yet, take a deep breath, and realize that now is the perfect time to start. The first step to develop saving plan is paying off any residual credit card debt. If you were to lose your job, this debt could get significantly out of control. Also, carrying a large balance on your credit card effects your credit rating.

A great way to figure out how to save or chip away at that credit card debt, is to analyze your bank statement. You can see where you are spending the most money and develop ways to reduce this spending. I will also be including a weekly Budget Lexicon “saving money tip” to help you get on your way.