Saving During A Recession: What You Should Know

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Saving during a recession can seem like it is an impossible feat. If you are out of work, you don’t the income levels necessarily to put anything in your gas tank, let alone in your bank account. Even if you do have a job, it doesn’t mean that you are making enough to save. Wages are lower these days, so even the employed may face issues with saving money.

Interest Rates Are Lower In A Recession

Just like interest rates are lower on most loans, they are lower on savings accounts as well. A typical savings account might net you just one percent or less in interest. To get a higher rate, you have to save more money. Typically, an account might not be eligible for a higher interest rate until you hit 10,000 dollars in your account. Not many people have that much.

Stock Market Returns May Be Down

This isn’t always true, but recession tends to bring with it a depressed stock market. This means that gains that you would usually see on stocks are not always going to hold steady in a recession. In fact, at one point during the past year, stocks were worth less than they were a decade ago.

Put Your Money Into Government Investments If Possible

A CD might not yield you a whole lot of money, but they are among the safest investments you can make for yourself. The interest rates are guaranteed for the term of the loan, and they will be realized no matter what the market is doing. Since they are so safe, it is a great way to put your savings into something that will generate income until the market stabilizes.

Save As Much As Possible

No matter how large or small the amount, you should be saving on a regular basis during a recession. You never know when you might be out of a job, or when an emergency will pop up. Having some sort of savings will allow you to solider on for a little while in case you face more financial hardship down the line. If saving isn’t palatable, at least put some money into paying down your debt. It is easier to be broke if you have no debt.

At the end of the day, you are going to want to know the market you are putting your money into. During a recession, it will be harder to make any type of big gains with interest rates being what they are. All you can do is save as much as you can and pay down as much debt as possible until the economy recovers.

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8 Simple And Practical Ways Your Family Can Save Money

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Families need to take many steps in these hard times to ease their financial burden. Some people will call it thrifty, economical or frugal, but it is simply practical. If you do not learn how to cut costs, you will eventually find yourself regretting it. Here are some simple and practical ways to save your family money!

1. Go for used Books
Used textbooks will contain the same information that new books will also contain. Websites such as Amazon and Half.com are great places to get cheap used books in fairly good condition. You can also get used books from friends and relatives for your kids.

2. Car Pool
To save money on gas, go along with friends or family members when going in the same direction.

3. Avoid Coffee Shops
Everyone loves a sweet cup of coffee, but if you love going to the coffee house frequently, you will soon find out that you have been spending quite a lot of money. It is more practical to buy a coffee for your house and experiment with different flavors at home.

4. Avoid Bottle Water
Bottle water may be more convenient and even better tasting, but you are paying for more than just the water. You are also paying for the cost of packaging, marketing and shipping. Local tap water is cheaper and may even be better. If you are not sure of the water purity, why not get a water purifier. This way you get clean water and pay less.

5. Avoid Take-Out
Every time you eat out, you pay more than it may cost you to prepare food at home. For families, paying for take-out may soon begin to eat deep into your purse. It is cheaper to buy groceries and cook at home. If your cooking skills are not so great, then you can begin to sharpen them now. Cooking at home may not be as delicious, but it will save you money, and you’ll get there!

6. Do your shopping online
Online shopping is a great way to save money and time. Buying things online is so easy and can be done from the comfort of your house. This way you do not have to wait on queues or deal with transporting. It is also easier to compare prices online and get great prices that you may not get in stores. You can also take advantage of online discounts, coupons and free shipping.

7. Avoid Groceries When Hungry
You hardly make the best decisions when you are hungry. When shopping with an empty stomach, you will hardly make the best buying decisions. Your hunger will likely make you rush through the process and you may regret your final decisions. Thus, it’s best to shop when you’re already satisfied.

8. Shop Smart
To shop smart, you will need to prepare and plan. Create a list of what you need to buy and stick to the list. The store will always have attractive items that could tempt you to stray, but be smart! Shopping smart also means that you take time to look around for best buys and best prices. It also means you might have to avoid brand names.

 

 

Ginny Kelly enjoys writing about nutrition, shopping & Mint.com Promo Deals.