How to Achieve Financial Stability With a Recession Looming

A looming recession can cause anxiety, especially if you live paycheck-to-paycheck. Surveys cited by CNBC show that concerns about economic downturns affect 74% of Americans, so if you feel this way, you're not alone. Golden Eagle Tax & Financial Services explains the good news is that you can take steps toward financial security, allowing you to flourish no matter the state of the economy.

Research Your Purchases

When you make a purchase, you want to ensure the product lasts so you don't have to spend money to replace it. For example, if you're looking for a cat tree, you want something that can withstand your kitten's attention. To find the best model, read customer and third-party reviews. These are relatively easy to find and provide insight into the pros and cons.

Look for Recession-Proof Income

Specific industries weather economic downturns better because they're essential services. Looking for a full-time job or side hustle in one of these industries is an excellent way to keep a steady income when others are getting laid off. The following are great places to start looking for recession-proof jobs:

• Childcare
• Security services
• Repair services
• Funeral services
• Education
• Delivery services
• Auto repair and maintenance services

If you prefer being your own boss, you can even start a business in one of the above sectors. Don't feel limited to one idea, either — having multiple sources of income can provide additional financial security, notes The NYU Dispatch. Many entrepreneurs decide to structure their businesses as LLCs, which are attractive due to tax advantages, flexibility, and the need for less paperwork.

Manage Your Stress

While you may be reasonably stressed about finances, too much anxiety can negatively affect your health. In addition to managing your financial wellness, take care of your mental health using stress-reducing practices:

• Practice mindfulness
• Breathe deeply
• Find support

Diversify Your Investments

Diversifying your investments ensures your portfolio doesn't go completely under as the stock market fluctuates. Even if it takes a hit in one sector, more stable options will keep you from losing too much. Fortunately, there are many ways to invest funds:

• Dividend stocks
• Mutual funds
• Government bonds

If you're unsure how to navigate the stock market, you can hire an investment firm. Financial experts know how to balance portfolios to grow during economic booms and remain stable during hard times. It’s also a good idea to call on investment specialists like Golden Eagle Tax & Financial Services to help with financial planning, investment management, and 401(k) maintenance.

Focus on Saving

In addition to savings you can see with a smart tax strategy, experts advise having an emergency fund covering at least six months of expenses. You should also have another savings account for general wealth building; if you want to save for a specific thing, such as a vacation, you should put that into a separate account. Of course, you may wonder how you're supposed to save money in all these places. The key is to start small:

• Decide on an amount you can save each month
• Automate the transfer to your savings
• Make a goal

Pay Off Debts

Credit allows you to make big purchases without breaking the bank, but accumulating too much debt puts you in a precarious position. If you have significant debt, paying it off can alleviate financial stress. To get started, make paying down your debts a priority:

• Look for repayment and forgiveness programs
• Make payments greater than the minimum
• Use part of your tax refund to get ahead

Recessions can be frightening, especially if you're financially vulnerable. However, you can utilize these tips to boost your income and reserve funds for a rainy day. As you work toward your savings goals or set up your new business, remind yourself that you're doing what you can to prepare. If you get too stressed, turn to others for help so you can stay healthy and follow your plan for financial stability.

Golden Eagle Tax & Financial Services has been performing tax preparation services and offering tax help in the San Diego area for more than 10 years. Contact us today to see how we can help you! 760-466-7262 or 760-443-1349