Three Recession No-no's

A recession is a decline in economic activity in at least two consecutive quarters. It is marketed by major job losses, large drops in consumer spending and decreased manufacturing productivity. For the average person it means changing jobs is more difficult and he/she has less money to spend.

Economists can debate the definition of recession until the last congressman dies but the debate changes nothing. For the average person a recession is when you have less money to spend and income increases are non-existent. Words mean little when you have no money to pay the bills.

Three things not to do when there is a recession:

1. Quit Your Job

Keep your job no matter what it takes. A rule of thumb is always; "You can get a job if you have a job". If you quit your job or position the odds of gaining something better are next to impossible. Quitting your job will place you in the position of having to accept less than what you had. The fact is in times of recession there are fewer jobs and the higher paying positions are first to be cut. Those jobs disappear!

2. Buy What You Can't Eat

New cars are nice especially when the dealers are offering so many incentives. Don't be fooled or tricked into buying a new or used car when you don't need one. Adding a payment and higher insurance isn't saving money it's shrinking your limited resources. The same is true for a boat, a horse, motorcycle, or hot-tub. Any big-ticket item that adds payments is a huge mistake.

Economists say that recessions are cyclical. That is economies fluctuate and correct. After a period of strong economic growth there will come a slowdown of growth. Knowing when one ends and the other begins is something no person has been able to predict with certainty. Warning signs are often ignored.

3. Invest What You Can't Afford To Lose

Golden opportunities happen only once. When the knock comes at the door the difference between opportunity and a fool's folly is timing. Buying a beachfront lot for half-price is opportunity when coming out of a recession. It is a fool's folly when entering a recession. Taking that dream vacation at a discounted price is rewarding one's self when coming out of a recession. It is the fool's folly when entering recession. Investing in anything is like gambling in Vegas; if you can't afford to lose it - don't gamble.

In a recession the general rule is interest rates rise. Credit becomes tight. Money becomes more than just a commodity it becomes life. Housing, food and health care are the first demands to be met. Do everything possible to hold onto money to cover those important needs.