In case you’re wondering, the age range for GenX is 42-60(ish) years old. Some of us are still having kids, may have grandkids and may be caring for parents too. For many of my fellow GenXers, we’re about to go through yet another Recession sometime sooner than later. The fact is, the older you get the more Recessions you will have the pleasure (I say this sarcastically) to experience. What I’ve come to realize being in the personal finance space is that a huge percentage of managing your finances is preparing for the unexpected and the unwished for.
The unexpected would be a pipe bursting in your bathroom and having to pay $1,000 to get it fixed (happened to me this year) or the unwished for which is a Black Swan event that comes out of the blue. The collapse of FTX if you were aggressively investing in crypto….I truly hope not, or an illness. For GenXers, with the first wave a few years away from retirement each additional Recession feels like a kick in the metaphorical nuts. We have a lot that we’re juggling financially. If you’re stressing out, I get it. If you’re wondering how GenX should prepare for the next recession, here are some ideas.
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How GenX Should Prepare for the Next Recession
Acknowledge that Recessions are natural parts of economic cycles. What goes up will go down. The strength of an economy’s health ebbs and flows based on a variety of different factors. These could include: regional conflicts such as the war in Ukraine, the continued impact of the COVID pandemic and even local politics. Basically, there’s a lot of stuff that is out of our control that influences our finances and financial decisions. GenX has already gone through several recessions so we know what to expect.
- Focus on what you can control-There is a reason why so much attention is placed on budgeting, working more and being clear about what your financial priorities are-these are actions that you can take based on the factors that you CAN control in your life.
- Create a Recession Budget Now-Instead of waiting until the shit hits the fan, plan your Recession budget now. If you’re coupled up, maybe you create a budget that assumes one income is lost. Not fun to consider, but wouldn’t it be better to think about what that looks like now versus in the moment? Ask yourself what are your needs and wants? What treats do you want to budget in and enjoy during an economic downturn? Maybe you love getting bougie coffees like I do. Maybe you start buying gift cards for your favorite coffee shop and setting them aside for later. DO check the terms and conditions for those gift cards so that you know when you have to use them.
- Start lowering your expenses now-I’m a huge fan of keeping your expenses low at all times, but there’s nothing worse than being forced to slash your budget during stressful times. Instead, slowly begin lowering your expenses now. Focus on the big expenses.
- Downsize your housing-Renting or owning is expensive. Now, this suggestion does depend on a couple of factors, where you live is a big one. Some regions are just expensive to rent or own in. If it’s impossible to downsize your home, it may be possible to rent out a part of your home. I even read a story online where one guy was renting out his SWIMMING POOL to parties. I love this idea. Maybe you have an extra parking space and could rent it out.
- Sell one of your cars-If you’re a multi-car family, sell a car. Right now cars are still selling above listing prices in many parts of the country. This is due to the impact of COVID. There will be an adjustment period as you eliminate cars in your family, but it will free up the following expenses:
- Insurance coverage
- Upkeep and maintenance
- Gas
- Lower your grocery budget-You’re probably thinking, Michelle, have you seen the prices of groceries? Yes, I have and my grocery costs have basically stayed the same. Here’s what I do.
- Use Ibotta–It’s a grocery savings app. The more you use the app, the more tailored the savings suggestions are based on the receipt data that you upload into the app. I’ve earned $600 in cash back since I began using the app a few years ago. That’s a significant savings for a single woman. I’ve met the CEO (it’s a Denver company and I live in Denver) if you sign up with my link you will earn $10 towards your first $20 redemption.
- Grocery shop once a week-Seriously, stop popping in the store several times a week. Be more intentional about the groceries that you’re buying. Changing this ONE habit will save you money and time. Before heading to the store check out what’s in your pantry. Then create a menu for the week. Don’t be weirdly rigid about it. Think of 3 or 4 entrees and then shop for the items that you need.
- Meat isn’t the main feature in most of my meals-I used to be a vegetarian. I’m not anymore LOL! I like to eat really good quality meat which means I’m buying grassfed beef, high quality fish, etc. When you’re doing this if meat is the main component of a meal-that meal becomes expensive. That’s why people love stews. You have chunks of meat in it but you also have a ton of veggies. You don’t have to do this for all of your meals. Adjusting even a few a week will help you manage the cost.
- Shop sales-When I was paying off that $60,000 in unsecured debt I always bought meat on sale. I STILL do this. In my town Sprouts has great deals on chicken, beef, etc. But, in your town it might be Aldi’s (we don’t have it in Denver). Know which grocery store offers the best deals on meat and then stock up when you see them. There are also certain days of the week where the sales seem to stack up. Pay attention to those details when you’re in the store.
Have a GenX and Family Finances Conversation
GenX is in an interesting position in that many people are juggling aging parents, preparing for their own retirements and may even have kids. Let’s not forget that we may also be dealing with debt and other financial responsibilities at the same time. It’s absolutely imperative to have ongoing conversations about GenX money and the impact of your family’s money on YOUR money at the same time. If you’re preparing for a Recession it would be absolutely insane not to have this conversation. Here are the following conversations you should be having and setting up contingency plans based on those conversations.
- Aging parents-What will you do if something happens to your parent’s money? Who is helping them with their expenses? Will you have to collaborate with your siblings on helping your parents out? Are you an only child? Do you have space to move your parents into your home?
- What are the expenses related to raising your kids? During a Recession what do you want to avoid cutting from your child’s life? If they are in a basketball league/science academy/etc. how do you continue to afford those experiences for your kids? Talk to your kids now to see where their heads are at. They may surprise you.
- Siblings and Extended Family-Sometimes things happen and you find yourself helping your siblings or extended family out. Work through what that would like for you before this ever happens. Don’t talk to your siblings about this. Just create an document for yourself and partner (if you’re partnered) about what that financial support looks like. Include the following:
- Expectations
- Do they need to pay you a small amount of rent?
- Are they allowed to bring guests over?
- Do they need to contribute to the groceries/lights/etc.
- Do they have access to one of your cars?
- Duration of time-How long can you help them out.
- What exactly is the help that you’re offering?
- Housing
- Cash
- Job leads
- Expectations
It may be a good idea to create a protocol related to how you deal with family finances. Each year review and update that protocol based on what’s happening currently in your life. It’s better to be a little too prepared and thoughtful than caught off-guard and shocked that you are helping a family member out.
How GenXers Can Prepare Their Own Finances for a Recession
As a GenXer, I think about this a lot. I don’t want to lose financial ground because a Recession hits. I spent years paying off a ridiculous amount of debt and rebounding from helping my mom out when she lost her job (she’s doing great now!) I feel very deeply bout the importance of preparing for financial downturns. I’ve been hurt by them in the past. I think it’s important to remember to focus on self as well.
- Increase your income-I’m actually a huge fan of increasing your income and I wish that we would talk about this more often. There are so many different ways to do this and I’m going to list several below.
- Work overtime-If your job offers overtime, work it! I love overtime because you’re already working there. Nothing new to learn.
- Change your job-This is tricky and should be approached with caution. Are you looking for jobs in an industry that does well during economic downturns? Build in a significant raise by applying for jobs that pay more.
- Pick up a side-hustle that’s easy to do-Here are a few of my favorites:
- Freelance writing or copy writing-Websites need content! Even my website needs content. If you enjoy writing, then freelance writing could be a great side-hustle that you can do from anywhere. One important suggestion-write content in 2-3 content verticals in the event that demand changes in one of them.
- Loopie-Wash people’s clothes from the comfort of YOUR home!
- Rover-Walk people’s dogs and get paid. If you like dogs this is a great side-hustle
- Teach a language online- absolutely love Italki and am learning Spanish on that site.
- Write romance novels or erotica-I’m serious. Two very different types of content. But, they both do well during downturns because it’s inexpensive entertainment. No guarantees with this option and it does take awhile to build up earnings so plan according. Basically, if you’re excited about this option start now.
- Make Money with Ebooks Course-If you’re looking to learn the ins and outs of making money online with ebooks, I’ve created this course and worked with authors on bringing their creative and non-fiction works to life.
- Customer service-Pick up a gig that allows you to work from home answering customer service related questions.
- Work at your local convention center or events venue-They are almost always looking for staff and it’s a great way to enjoy events for free while getting paid. I’ve attended a number of concerts, comedy shows and other events because I was side-hustling at my local convention center.
- Save More Money-Americans are saving around 3% at the time that I’m working on this post. That’s not a lot of money. Focus on saving more of your income after expenses.
- Automatically save your raises
- Eliminate uneccessary expenses and bank that savings. If you have multiple streaming accounts, maybe you get rid of one and bank that savings.
- Save any windfalls that you receive
- Keep track of your cash back rewards with CashFreely, a free app.
- Pay ahead on certain expenses-Go through your monthly expenses and see if it’s possible to pay ahead on them. Those expenses could include: your electric bill, phone or internet service, water bill or favorite streaming service. Call and check with the service provider to see if they allow pre-payments of services.
- Continue investing for your future OR start investing for your future-One of the most frustrating things that I see in personal finance media is that you should have started investing younger. We know that. BUT, some people are starting now and that’s 100% ok. My grandma began investing when she was in her 50s. Please remember that the 401k is a new financial product. No one knew what it was. She has been retired for over 30 years. She literally invested for 10 years. Just start now and start where you’re at.
- Budget for fun NOW-There’s nothing worse than dealing with an economic downturn and not being able to do anything fun. Know what you enjoy and start planning for that now. You might not be able to do it as often, but you can still enjoy it. Here’s what I’ve done.
- Check out Facebook and Eventbrite for free or inexpensive fun! I found a $5 goat yoga class this year and it was so much fun.
- Purchase fitness passes on sale.
- Work at your favorite enjoyable space. I used to work at a dance studio and got to take unlimited classes while getting paid.
- Ask for gift cards towards the fun things that you enjoy for your holiday gifts
- Go online and check out free fun in town. Here are some examples in Denver
- The November Project-Outdoor fitness collective. There are chapters all across the United States and some chapters overseas
- Roller Skating groups-This one I’m really excited about because I love to roller skate and they meet a couple of times a week.
- Meetup.com-I can’t rave enough about Meetup! There are groups for everything you could think of and you could also create your own group.
- Pickleball Leagues-It’s like tennis, but not. Then, add beer.
- Running groups-These are huge in my town. You just need good tennis shoes
- Local events-Holiday markets, farmers markets, parades, inexpensive tickets to sports events, pop-up experiences, enjoying the mountains/lakes/coast/etc.
- Budget for Future Travel-Use TravelFreely, a free app, that helps you keep track of your credit card mileage reward points. Sign up for Scott’s Cheap Flights in order to find out about surprise discounted flights. Sign up for Amtrak’s Guest Rewards points program as well to earn points towards train travel.
Start planning for uncertainty now so that you don’t have to make difficult choices during stressful times. Don’t worry about what you haven’t done so far. Focus on what you can do moving forward and get started preparing for the next recession now.
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