With economic experts forecasting a recession in 2023, families nationwide are anxious about making ends meet if the economy declines. Consumers face immense financial pressures from high inflation, rising interest rates, stock market volatility, and growing fears of job losses. Prices have surged on essentials like food, housing, transportation, and utilities. Yet wages are not keeping up with the skyrocketing costs of living. Many households are being forced to deplete savings to cover monthly expenses. Turbulent economic times require individuals and families to get smart about budgeting, cut unnecessary costs, and establish thrifty habits that enable them to live well on less.
The coming months will test financial fitness. However, recessions also create opportunities for positive change. With some strategic adjustments, this economic downturn can be embraced as a chance to upgrade money management skills, streamline spending, and set future generations up for prosperity through frugality. This article will provide ten practical and actionable tips to stretch dollars further during the recession. Even a few savings strategies can lead to hundreds of dollars retained annually. While the road ahead will have challenges, embracing frugality now allows for coming out stronger on the other side.
1. Evaluate Recurring Expenses
Carefully review your monthly recurring expenses – subscriptions, memberships, bills, insurance plans, etc. List these expenditures and critically examine whether they are genuinely needs or wants. Entertainment services like Netflix or Spotify, gym memberships, cable packages, and subscription boxes can be canceled or downgraded during a recession. Even decreasing extra cable channels or switching to a cheaper phone plan helps. The money saved from trimming non-essential monthly costs quickly compounds.
For example, downgrading an expensive cable TV package to a basic streaming plan can save over $50 a month or $600 per year. Treat recurring payments almost like a rental agreement – regularly check if they still offer value worthy of the cost.
2. Reduce Grocery Spending
Groceries likely represent a significant chunk of your budget. With prices rising, being smart about food shopping is essential. Make meal plans based on sales flyers, create detailed grocery lists, purchase generic brands instead of name brands, look for coupons and discounts, buy certain items in bulk, and freeze any leftovers to prevent food waste. Planning and organizing grocery trips allow you to get in and out of the store quickly, reducing impulse purchases. Give yourself a grocery budget to stick to each month as prices rise.
For instance, choosing store-brand cans of beans over the name-brand version saves around 20 cents per can. Buying a four-pack of store-brand butter when on sale saves almost $2 compared to purchasing name-brand butter at full price. Small savings per item add up.
3. Lower Utility Bills
Utility costs like electricity, water, gas, and heating can take up a significant portion of your budget. Finding ways to reduce usage lowers monthly bills. Simple habit changes like turning off lights when not in use, using energy-efficient LED light bulbs, washing clothes in cold water, taking shorter showers, utilizing ceiling fans to regulate temperature, and weatherproofing windows and doors to prevent drafts can help conserve. Compare rates from utility providers every six months and switch if better deals are available.
For example, setting your thermostat just 2 degrees lower in winter and higher in summer can reduce heating and cooling bills by up to 10 percent per year, saving over $200 annually for many households.
4. Cut Back on Gasoline Usage
With historically high gas prices, reducing fuel consumption is more vital than ever. Consolidate trips by running all your errands at once. Walk or bike for short-distance transportation when possible. Take advantage of public transportation like buses if available. Maintain your vehicle well – keep tires inflated properly for better mileage. Avoid sudden accelerations and braking to drive steadily. Use apps to find the cheapest local gas stations. Consider getting a more fuel-efficient vehicle if you plan to purchase it shortly. Every small effort to drive less helps limit the pinch at the pump.
A simple tactic like skipping just one 6-mile round trip per week saves over 300 miles of driving per year. At 25 mpg and $4/gallon, that removes $48 worth of gas spending annually.
5. Limit Eating Out
Eating meals at sit-down and fast-food restaurants becomes costly, especially for families. While the convenience is excellent, preparing meals at home and bringing leftovers for packed lunches saves substantially on food budgets. Get creative in the kitchen with inexpensive ingredients like beans, eggs, rice, and canned foods. Establish a weekly meal plan and grocery list to ensure you have the ingredients to cook dinner each night. When you do dine out, look for special deals and coupons. Consider reserving excellent restaurant meals for special occasions rather than everyday conveniences. Learning frugal cooking strategies helps your food dollars stretch much further.
For example, a family of four spending $60 dining out twice weekly adds up to over $6,000 annually. Cutting restaurant meals in half could save $3,000 or more per year.
6. Find Free Entertainment
Budget recreation by utilizing free community assets like public libraries, parks, beaches, hiking trails, and museums. Libraries rent books, movies, music, and more for free. Take advantage of free community events like summer concerts and farmers’ markets. Rather than paying for cable TV, Netflix, Spotify, and other streaming services, look for free alternatives to stay entertained. YouTube, Crackle, Kanopy, Peacock, Pluto TV, and Freevee all offer free movies, TV shows, and more with minimal ads. Use digital access cards from your local library to open up even more free entertainment options.
Canceling a $10 monthly streaming subscription for free ad-supported services saves $120 annually. Trading paid cable packages for free digital content saves even more.
7. Learn DIY Skills
Significant savings can be realized when you can perform basic maintenance and repairs yourself. Watch online tutorial videos to learn skills like basic plumbing and automotive repair. Fix leaky faucets, update hardware, and caulk bathrooms to prevent mold and mildew growth. Change your own windshield wipers, batteries, air filters, and do oil changes. Cut family members’ hair to avoid barber shop visits. Once you build proficiency, move on to more complex DIY projects to reduce home maintenance and improvement costs.
Instead of paying $30 for a haircut once per month, learning to cut your own or your child’s hair saves $360 per year. Fixing minor home repairs yourself rather than hiring a handyman to do the work can save over $1,000 annually.
8. Reassess Insurance Policies
Occasionally, review your insurance plans and look for opportunities to lower monthly premiums. Consider raising deductibles if financially able to. Bundle multiple policies with the same insurer. Compare quotes from other providers every 1 to 2 years for potential savings. Drop unnecessary coverage types to simplify plans and remove extras. For example, those facing recession hardships may decide that paying for flood insurance in a low-risk area is not the best use of limited funds. Keep in mind as income decreases, premium subsidy qualifications increase.
Raising a $500 insurance deductible to $1000 could lower your premium by 15 to 30 percent, saving hundreds of dollars annually. Bundling home and auto insurance plans often save 10 percent or more.
9. Save on Healthcare
Healthcare costs have risen substantially in the past two years. Saving money on medical care is essential during this recession. Always choose generic over brand-name prescription drugs. Compare prices using apps like GoodRx before filling medicines. Utilize Health Savings Account pre-tax benefits if available through your employer. Explore crowd-sharing programs as an alternative to traditional health insurance. Focus on diet, exercise, and lifestyle changes to improve health and prevent illness. Stay up to date on standard vaccinations and wellness exams to avoid higher costs of serious sickness down the road.
Choosing a yearly $ 5,000 family deductible health plan over a $ 1,000 deductible plan saves about $3600 per year in premiums for many households. Finding the right balance between premiums and deductibles that fits your situation saves the most.
10. Supplement Income
The adage “every little bit helps” really applies during a recession. Consider ways to produce extra income through a side gig and your regular job. Possibilities include freelance writing, rideshare driving, food delivery, handyman work, pet sitting, garage sales, and more. Sell gently used items you no longer need through Facebook Marketplace and Craigslist. If available, rent out an extra room, basement, or unused storage space. Turn hobbies into cash-generating endeavors. Adding even an additional few hundred dollars monthly can offset recession impacts.
Working ten flexible rideshare hours per week at $15/hour generates an extra $600 per month or $7200 annually (minus taxes and vehicle wear) – an excellent supplement to offset rising costs. Selling used goods nets varying amounts depending on volume.
Conclusion
With prudent budgeting and wise spending habits, surviving and thriving financially through an economic downturn is possible. Carefully review where your money goes each month. Look for areas where cutting back can free up significant savings. Prioritize needs like housing, utilities, food, and transportation over wants like dining out and entertainment. Tap into free community resources more. Learn strategic money-saving life skills to build long-term frugality habits. Supplement with extra income if possible. With planning and discipline, households can weather tight recession budgets – and even come out stronger on the other side.
This period of financial challenge can serve as a reset button for many households. Embrace the opportunity to get lean and efficient with spending. Build a recession toolbelt of frugal living skills that will continue benefiting your bottom line for years. Get creative and try new money-saving strategies. Collaborate with your community to cut costs and support one another. The economic storm ahead will pass. With an adaptable and tenacious spirit, your family can make it through to see brighter days. Focus on the essentials, trim the excess, and work together to create an affordable lifestyle that still brings joy, connection, and community. How will you build recession resilience this year?