A great money to save money during a recession (or anytime) is to pay yourself first.
What does this mean? It means you take 10% of your after-tax income and save it, preferably using dollar cost averaging in an equity index fund. You do this before making your budget or paying your other bills and you do it every time you get paid.
You may be thinking, “The stock market is tanking…why would I do that?” We hear ya. The beauty of this strategy is that during the down times, your 10% buys more shares and during the up times it buys fewer. This means you will be insulated from stock market swings. Add in the effects of compound interest and you may just end up rich no matter what the economy and stock market do.
Some great books to check out in terms of paying yourself first are The Wealthy Barber
We highly recommend both books.
If you do nothing else suggested on this blog, pay yourself first. It is the single best thing you can do for your financial future.
These tips are so helpful. I am appreciating sites like this and interesting blogs that offer links to other useful pages. It is great to feel like you are in control again.
This is a great, user-friendly blog. What are others that you recommend?