We have had recessions in America in the past which has affected various industries such as agricultural and manufacturing. The last recession we had was in 2001. There have been 8 recessions in the past 40 years and since 1945 there have been 11 recessions.
The shortest recession lasted 6 months while the longest lasted 16 months. A recession is defined by Webster's as: an extended decline in general business activity, typically two consecutive quarters of falling real gross national product (GDP) or the state of the economy declines; a widespread decline in the GDP and employment and trade lasting from six months to a year.
The economy is classified as being in recession only if there is a widespread decline in the economy that includes an overall decline in production, employment, personal income, industrial sales, and total manufacturing and trade sales. The decline must be long enough to be classified as "substantial and significant." This recession included industries such as housing, oil, employment and manufacturing. We know we were in a recession because:
1. Shares price dropped sharply
2. There were frequent employee layoffs
3. Several business went bankrupt
4. There was a rise in unemployment
5. There was a decline in employee income
6. There was a decrease in sales of manufactured products
8. Americans received an economic stimulus package refund
9. Interest rate reductions by the Federal Reserve z times in the past x months
10. There was an increase in negative savings rate
11. Economic issues developed in other countries
12. Value of the dollar sharply declined
13. ising costs of products or services
Here are 5 ways to protect yourself during a recession:
Protect your investments - call your broker and adjust your portfolio to limit the effects of the recession and money lost during this time. Ensure your portfolio is adequately diversified.
Stay calm - don't make rash decisions based on your emotions. Before making any changes think about your situation and wait one or two days and think about a solution. Get advice from friends or family members who have previously had financial crises.
Reevaluate your existing mortgage loan - review your existing mortgage loan to see if you got a good deal on your mortgage loan. If not, it's time to refinance to a lower fixed interest rate that will provide a level of stability to help you get through these difficult times.
Reduce your debt - create a debt payoff plan to identify the total debt owed, the minimum monthly payment and balance on each account. Create a plan to pay off each bill and find ways to reduce expenses to get extra money to pay down debt.Update your resume - if you are currently employed and as a general rule of thumb, each time you start a new job or new position with your existing company revise your resume. Update it at least once every 6 months. Take training class or learn a new process or skill at work to make yourself seen as a valuable asset to the company. Also, begin networking with staff outside your department to make alliances to staff that can provide leads, and other information on finding a job.
Good luck!
