Surviving the Recession is a Frame of Mind

The current economic recession has taught many of us some valuable lessons. While these lessons may vary from person to person and by how the recession has affected us, many have had some slight epiphany when it comes to the managing of their personal finances. Whether it's cutting back on entertainment, reviewing food costs, changing spending habits, using coupons, selling a home, losing a job, extending retirement timelines, reevaluating market or portfolio allocations or whatever, it's hard to find someone who hasn't made some type of change or come to a realization due to the current economic climate. But sadly to say, for many, these changes won't stick when things get better. Rather, these people will go back to the old ways that got them here in the first place, forgetting the valuable lessons they learned only a year or so prior.

Change Your Mindset

Among the many lessons the recession has taught us, there are some we might prefer to ignore. However, ignoring them won't make them go away, and won't make them any easier to handle during the next go around. Here are a few of the more blatant and probably some of the more valuable lessons learned.

-- A job isn't guaranteed. Whether you have one now or are currently looking, few

jobs are guaranteed as safe anymore. It's time to realize jobs are now privileges

not rights.

-- A home isn't just a home. A home is more than a home, it's a responsibility. Like

a child, or a vehicle, a home is going to cost you money, but there is a larger social

responsibility to avoid the urge to run when times get tough and stand by your home

even in tough economic conditions.

-- Maybe living paycheck to paycheck isn't such a good idea. While many still do it,

whether by choice or not, as people lose homes and assets left and right, we're

seeing the results of living paycheck to paycheck, and they aren't pretty.

-- An emergency fund really is important; people weren't just saying that to hear

themselves talk.

-- Frugality isn't shameful. Living efficiently and economizing is good for people as

well as they environment. People need to get over being embarrassed about being

seen at the local Goodwill Store, discount grocery store or garage sale and do

what's smart and responsible.

Expect It Again

This wasn't the first time we've been socked with a severe economic downturn, and it won't be the last. While we're still struggling in the midst of this recession, we might not want to think about it happening again, but we probably should. This sooner we recognize this fact and start preparing ourselves for it, the better.

Plan Ahead

So, if we know it's coming, shouldn't we be planning ahead, stockpiling some reserve funds, teaching ourselves about frugal living, and generally kicking the typical American spending habits? Given, we got hit hard this time, and many of us are still struggling to recover and may not yet have the ability to start planning for next time. But the American public seems to forget quickly how bad things can get, and while this might make for a quicker, healthier, more optimistic economic recovery, it doesn't bode well for society the next time around. While this doesn't mean we all have to stop our spending and start living like Depression-era Americans, it does mean that we can start mentally preparing and changing the way in which we live and spend so that we are better acclimated to such a harsh economic environment the next time it hits.

Disclaimer:

The author is not a licensed financial professional. The information provided in this article is for informational purposes only and does not constitute legal or financial advice. For financial advice, readers should consult a licensed financial advisor. Any action taken by the reader due to the information provided in this article is solely at the reader's discretion.