It is now uncertain whether an economic downturn will occur or not. But every person should definitely prepare for economic downturn from now on.
The first step is to avoid unnecessary expenses. Spend money carefully on essential items only. If you want to avoid wasteful spending, you must first identify where money is being wasted.
When it comes to savings, many spend the entire month and save what little money they have at the end. Otherwise, you should save a certain amount in it immediately after receiving the salary. Only the remaining amount should be spent.
The primary focus should be on repaying high-interest loans. In particular, credit card debt should be paid off first. Failure to do so will result in higher debt burden later.
Every person should create an emergency fund. An emergency fund is the amount you need to cover expenses for 6 months even if you are out of work. For example, let’s say your monthly salary is 30000 rupees. 1.8 lakh rupees should be in your emergency fund for 6 months. It is enough to save this little by little. Many people lost their jobs during the corona crisis. Emergency funds come in handy in such situations.
Saving money is not enough; It should be invested. If there is an economic downturn, the stock market will not be favorable. Gold is considered the best investment during such crisis periods.