8 Steps to Creating Your Recession-Proof Financial Plan

Are you a planner or do you live life on the edge? As far as financial planning goes, the majority of Canadians fly by the seat of their pants.

35% of all adults have less than $1000 in savings and 34% have no saving at all! With experts predicting a recession coming, getting your finances in order should be a top priority.

Looking for tips for creating your recession-proof financial plan? Keep reading to learn the 8 steps to follow to secure your financial future.

Financial Plan Essentials:

1. Financial Statement Template

What is a financial statement? A financial statement shows the health of your personal finances. Using a financial statement template to list your assets and liabilities, you’ll find out your net worth. This helps you to understand how long you can live comfortably if you suddenly lose your job or experience some other life-altering event. 

2. Tackle Your Debt

When bad times hit, having a $500 monthly credit card bill only makes things worse. Think about paying down your high-interest debt when times are good and you have the extra cash. 

3. Save While You Can

Worried about what’s going to happen with the economy shut down for so long? The best thing you can do is to build up your emergency fund and your savings account. 

You should always have some sort of savings to fall back on, but an emergency fund is advised for times of uncertainty. Your emergency fund should have enough money to cover your rent or mortgage, your car payment, utilities, insurance, and any other financial obligations for several months. 

4. Alter Your Spending Habits 

Do you need to go out to lunch every day? How about that expensive coffee? Think about your spending habits and eliminate spending on things that don’t make you happy in the long run. 

5. Side Hustle 

Do you have a hobby or skill that can earn you some extra money? Consider trying to make some extra cash from a side business. You’ll have peace of mind when you have some money coming in even if you lose your main job. 

6. Network 

Do you have the perfect job? You find yourself getting comfortable in your position, but you should never stop networking. Keep your ear to the ground and keep your professional connections. You never know when you might need them. 

7. Diversify

Don’t put all your eggs in one basket. Diversify your portfolio. Investing in one company is too risky because you are dependent on their success or failure alone. 

8. Pay Attention to the Market

Do your own research. Pay attention to the stock market and historical trends. Remember there’s volatility in the market, but you have to ride out the storm. 

Define Financial Independence. By using a sound financial plan, you can claim your financial independence. 

Next Steps

We at Covenant Wealth Financial Services provide holistic financial planning advice to families, individuals, and business owners. 

We provide our clients with cutting edge financial tools to help create and sustain a legacy of wealth. Contact us today.