Recession and the invincibility complex

January 9, 2008

A while ago, I wrote about the invincibility complex and that you should be really careful with it.

I’m a skeptical by nature, so it’s easier for me to expect that good things won’t last forever.

But for those of you that are too optimistic, you should step back and take a deep breath.

Some economists are not debating anymore whether the US economy will fall into a recession. They’re debating whether it already has.

Jobs are being slashed right and left. The dollar is weak. Unemployment has risen. These are depression signs.

We like to think we’re good at our jobs. That they value our work and our commitment. That we’re untouchable, invincible. Sky is the limit. Until this depression hits us harder and harder and eventually you find yourself in a hole.

So take a minute and just suppose you’re not invincible and that you might actually lose your job.

Best to be prepared. Here are a couple of tips for you:

- Save as much as possible. Better have 6 to 8 months saved to pay your bills.

- Try to be frugal for a few months (to get a better reading on where the economy is heading). It’s better to be frugal for the long term, but if you can’t, at least try it for a few months.

- Postpone your expensive vacations or replace them with cheaper ones.

- Analyze your budget and find what you could cut to trim your expenses if you lose your job.

- And most importantly, be psychologically prepared for it. It’s much easier to handle a tough situation if it doesn’t come as a surprise.

Posted in Finances, Lifestyle