The world has to buckle up for a rough year. According to a report by the World Economic Forum, the World Bank has predicted a global recession in 2023, with a GDP growth of 1.7% – the slowest rate since 1993 (other than the recessions of 2009 and 2020). Increased inflation, higher interest rates, disruptions from the COVID-19 pandemic, and the war in Ukraine contribute to the gloomy outlook.
So, how can you prepare for the recession in 2023? In this global economic climate, it’s crucial for individuals to have a plan in place to ensure financial stability. Recession-proofing is about taking a proactive approach to your finances, making smart decisions, and being prepared for any challenges that may arise. Whether you’re a seasoned investor or just starting to build your financial foundation, the key lies in finding a balance between preparation and action. With the right strategy, you can not only protect yourself from the impact of a recession but also enjoy financial security and peace of mind. In this article, we discuss the various strategies you can adopt.
1. Stay disciplined with your spending
During a recession, it is more important than ever to live within your means and avoid overspending. Make a budget, stick to it, and avoid impulsive purchases. Stay focused on your long-term goals. Despite the economic uncertainty, it is important to stay focused on your long-term financial goals. Having an emergency fund can also tide you through in times of economic uncertainty. Aim to save at least six to 12 months of your salary in a high-yield savings account. This will provide a cushion during a recession and help you weather any sudden job loss or financial emergency.
2. Be judicious with job choices
During uncertain economic times, it is essential to consider job security and stability when making career decisions. This means choosing positions and industries that are less likely to be impacted by a recession and have a history of resilience. For instance, employment in certain sectors, such as healthcare and ministries, tend to offer stronger job security, according to a report by CNBC.
It’s also important to consider the job market and the demand for certain skills and professions. Staying informed about industry trends and developments can help individuals make good decisions about their career choices and increase their chances of job security, even during a recession. According to Robert Walter’s digital Salary Survey 2023, the most in-demand professions for 2023 are in the following sectors: technology, banking and financial services, commerce finance, human resources, sales and marketing and supply chain.
3. Upgrade knowledge and skills
Investing in oneself through education and professional development is an important aspect of recession-proofing. By continuously upgrading one’s knowledge and skills, individuals can increase their value in the job market, making them more resilient in the face of economic challenges. The Singapore Government recognises this and is embarking on several initiatives to develop an ecosystem for lifelong learning. Together with several other entities, namely educational institutions, learning providers, and industry, it offers resources and programmes to bring out the full potential of workers in Singapore.
Moreover, by investing in education and training, individuals can increase their earning potential and ensure they have a solid financial foundation, even during tough economic times. This can help them weather the storms of the forecasted 2023 recession and emerge on the other side with their finances intact.
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PSB Academy offers a range of courses: diploma, undergraduate, postgraduate and short professional courses across a variety of disciplines, such as accounting and finance, cyber security, and life science. Whether you’re a mid-career professional or a fresh graduate, upskilling can give you an added advantage that can prove to be an armour during a recession. Learn how our courses can help you complement your existing skillset or your academic inclinations.
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