Coming out of a recession is like emerging from winter into spring. There are opportunities for new growth if you get rid of the dead wood and prepare for the new season. If you have lost your job or lost income there are four steps you should take to rebuild your wealth.
Focus on Survival
The first priority is to make sure you are living within your budget. A lower income means your expenses need to be lower as well. Find ways to make ends meet and make your dollars go further. You may have to adjust to a lower standard of living for a while.
Have a Clear Out
Get rid of your financial dead wood. Make paying off your debt a top priority. If your debt has become unmanageable, make arrangements with debtors to pay it off over a period of time
Sell off household ‘stuff’ that you don’t need to free up cash. Get rid of investments that aren’t producing a good return. For some, it might be a case of selling up assets and starting again.
Consolidate and Strengthen your Financial Base
Start saving so you have money to call on if needed. Review your goals and the resources you have available for meeting them. Reflect on the lessons you have learned from the recession and decide what you will do differently for the next one.
Look at ways of increasing your income, for example by up-skilling or retraining to get into a new field. Find businesses which are growing and see what kind of skills they need.
In investment markets, look for early signs of where the new opportunities are for example investing in emerging markets such as China.
Take the chance to be a leader; it is the early bird who catches the worm.
Liz Koh is a financial adviser. Her disclosure statement can be obtained free of charge by calling 0800 273 847. Author of Your Money Personality; Unlock the Secret to a Rich and Happy Life, Awa Press, March, 2008. For free eBooks, go to www.moneymax.co.nz and www.moneymaxcoach.comno