When a recession hits, it can be difficult to understand what it means for you.
If you’re struggling to identify the areas where you can help your financial situation during a recession, look no further.
Kevin Mountford, co-founder of savings platform Raisin UK, has shared some tips for those who are unsure what to do during a recession.
Kevin said: “As the UK enters a recession, it's important to understand what this economic term signifies and how it impacts individuals and businesses alike.
@uktoday_ Here’s the UK Recession explained #ukrecession #recession2024 #gdp #uknews #uknewsheadlines ♬ original sound - UKToday 🇬🇧 Newsquest
“A recession is typically characterised by a significant decline in economic activity across sectors, resulting in lower employment rates, reduced consumer spending, and diminished business investment. This downturn often lasts for several months to years, affecting various aspects of daily life.
“For individuals, a recession can translate into job losses, wage cuts, or increased financial insecurity. It underscores the importance of prudent financial management, such as budgeting, saving, and debt reduction, to weather economic uncertainties.
“It may also prompt individuals to reassess their career paths, upskill or reskill to remain competitive in the job market, and explore alternative sources of income.”
6 tips to help you with your finances during a recession
Kevin Mountford, co-founder of savings platform Raisin UK, has shared six tips to help you with your finances during a recession.
Budgeting
Take a look at your finances and create a budget to make sure you’re living within your means. Cut down the expenses that are non-essential and prioritise essential ones.
Tips for first-time buyers
Emergency fund
If you haven’t already started an emergency fund, Kevin says it’s good to have one.
During uncertain times, having savings equivalent to at least three to six months' worth of expenses can provide a safety net.
Debt management
If you have debts, try to pay them off strategically. Kevin encourages you to prioritise high-interest debts first and consider renegotiating terms with creditors if necessary.
Diversify income
Explore opportunities to diversify your income streams such as freelancing, part-time work, or starting a side business as multiple income sources can help mitigate financial risks.
Recommended reading:
- What is a recession and what will it mean for me for the rest of 2024?
- When was the last recession as UK economy shrinks to new recession
- How does a recession affect house prices: What to know
Upskilling
Invest in developing new skills or furthering your education to stay competitive in the job market. Look for training programs or courses that align with in-demand industries.
Government support
Kevin advises that you stay informed about government support schemes available during a recession such as unemployment benefits, tax credits, or business grants. He encourages those who are eligible to take advantage of these resources.
Kevin adds: “Remember that recessions are temporary, and taking proactive steps to manage your finances and career can position you for long-term success despite the economic challenges.”
Why are you making commenting on The Herald only available to subscribers?
It should have been a safe space for informed debate, somewhere for readers to discuss issues around the biggest stories of the day, but all too often the below the line comments on most websites have become bogged down by off-topic discussions and abuse.
heraldscotland.com is tackling this problem by allowing only subscribers to comment.
We are doing this to improve the experience for our loyal readers and we believe it will reduce the ability of trolls and troublemakers, who occasionally find their way onto our site, to abuse our journalists and readers. We also hope it will help the comments section fulfil its promise as a part of Scotland's conversation with itself.
We are lucky at The Herald. We are read by an informed, educated readership who can add their knowledge and insights to our stories.
That is invaluable.
We are making the subscriber-only change to support our valued readers, who tell us they don't want the site cluttered up with irrelevant comments, untruths and abuse.
In the past, the journalist’s job was to collect and distribute information to the audience. Technology means that readers can shape a discussion. We look forward to hearing from you on heraldscotland.com
Comments & Moderation
Readers’ comments: You are personally liable for the content of any comments you upload to this website, so please act responsibly. We do not pre-moderate or monitor readers’ comments appearing on our websites, but we do post-moderate in response to complaints we receive or otherwise when a potential problem comes to our attention. You can make a complaint by using the ‘report this post’ link . We may then apply our discretion under the user terms to amend or delete comments.
Post moderation is undertaken full-time 9am-6pm on weekdays, and on a part-time basis outwith those hours.
Read the rules hereLast Updated:
Report this comment Cancel