25 tips for hard times

In the world of economics there are few proverbial jokes that offer less insight into the current state of the economy than this: “A recession is when your neighbor loses his job. A depression is when you lose your job.”

The U.S. slipped into recession in December 2007. Canada is thought to have followed suit in December 2008, but we won’t actually know for sure until May when official numbers are expected to indicate the economy to have gone through two quarters of negative growth, thus having the variables needed to declare it an official recession.

Proverbs aside, a prolonged recession where real Gross Domestic Product (GDP) falls by more than 10 per cent, is called a depression, a term introduced during the presidency of Herbert Hoover (1929-33) as a euphemism for “panic.” During that depression Canada’s economy shrank for four consecutive years starting in 1929 while the American economy cratered by 33 per cent.

Unemployment in the U.S. peaked at about 25 per cent, and in the early years after 1929, about 8,000 U.S. banks collapsed. By comparison, most current forecasts have U.S. unemployment rising to as much as 11 per cent this year, up from 6.9 per cent last fall. GDP contraction in the U.S. — which is expected to be worse than in Canada — should be in the range of no more than 2 per cent to 3 per cent in 2009-10.

Still, with even the most optimistic forecasts not predicting a return to growth until late this year early next, we have compiled 25 tips for the average reader to survive a recession (assuming we’re in one) that might help you come out in 2010 with more than just your shirt on your back.

1. Switch to a credit card with a lower interest rate. There’s no sense collecting air miles or other such points if you can’t even pay off your monthly bills. Equally, there’s not much point in paying 20 per cent interest when you don’t have to. You might try shopping around then ask your credit card provider to lower your rate, especially if you’ve received a better offer from a different provider.

2. Go retro and clip coupons. A 50 per cent coupon for a sandwich at your local McDonald’s is the next best thing to a food stamp.

3. Be sure to pick up the sales flyer at your local grocer whenever you shop. You never know what savings you might find tucked in the corner of the meats or frozen foods sections. On that note, you might want to reacquaint yourself with the age-old tradition of marinating stewing beef and turning it into filet mignon. A $3 cut of veal shoulder, if marinated for 12 hours can taste hauntingly similar to a $15 sirloin steak but at a fraction the cost.

4. Do your food shopping at discount stores. No Frills and Food Basics might be more crowded and offer less selection than your local Loblaws or Metro and you’ll have to pay a quarter for the cart and bag your own groceries, but you’ll see a payoff at the cash register. If you’re shopping for a larger family try buying in bulk from stores like Costco.

5. Give the office cafeteria a wide berth and get into the habit of packing your own lunch. You’ll save money and calories, even if you are just eating peanut butter sandwiches.

6. Throw away your bank card and leave your credit card at home. ATM charges can add up and it’s hard to live on a budget if you keep paying for things on credit. Or, try only using your bank card once between pay cheques. That will help you budget your money accordingly.

7. Join your local Free Lance network, where people pass on baby gear, furniture, electronics, clothing and craft supplies, among other stuff, for free.

8. Cancel your gym membership. Go for a walk or run around your neighbourhood instead. If it’s muscle you’re trying to amass then start doing push ups in your bedroom, invest in a chin-up bar and start walking up and down multiple flights of stairs. You don’t need to spend $50-$150 a month to stay active.

9. Having a baby? Ask around for hand-me-downs. Most parents are eager to get rid of the mounds of kids’ gear cluttering up their basements.

10. Got kids? Forget shopping at Baby Gap. Buy children’s clothes at discount retailers or department stores. Your two-year-old won’t know the difference, and if they do they won’t remember it for too long anyway as their brains are still evolving. Better yet, phone up everyone you know with young kids, bring them all together and swap anything from shoes to strollers to clothes and toys.

11. Find free or low-cost activities for your kids. Ontario Early Years Centres, school board parenting centres and city recreation programs are good places to start.

12. If you’re getting $100 a month from the government for child care, try your best to keep banking it in a high interest savings account for your child’s future. Saving can be hard, especially in these times, but a few dollars a month can go a long way over the course of 20 years..

13. Switch to Skype for long-distance calls. After the initial hardware investment, it’s free or practically free to call friends around the world.

14. Itemize your monthly expenses and allocate money for each by placing it in marked envelopes. If you only want to spend $50 this month on entertainment, then put $50 in an envelope marked “Entertainment” and use it to entertain yourself. Once the money’s spent, that’s it. No more fun. It’s shrewd and effective.

15. Don’t ignore inflation. Many economists predict that, with so much money being pumped into the global financial system in bailouts and stimulus packages, inflation is destined to rise. So make sure the interest on your savings keeps up with the level of inflation from here on in. If, for example, inflation hits 5% and you’re still only getting 3% in your savings account you’re going to come out the loser.

16. Instead of an expensive vacation to the Bahamas this year, why not try a “staycation” — a trip to the CN tower, the theatre or a local maple sugar bush is infinitely less expensive than a sunburn and you’ll be infinitely less depressed when you return to work the next day.

17. Make an appointment with your financial adviser to review your portfolio. It’s too late to protect yourself from recent carnage in the markets, but you can at least position yourself for the recovery – if and when it comes.

18. If you and your friends have young kids, consider setting up a babysitting co-operative with another family. You look after their kids for an evening in exchange for a night out at a later date.

19. Bring a coffee maker or kettle to work. With coffee ranging anywhere from $1 to $5 a cup (depending on size of cup, exoticness of brew and franchise from which it is purchased) some people are dropping anywhere from $20 to $200 a month just to stay caffeinated. Don’t believe it? Try this: bring your own coffee to work, make it yourself and put the money you would have spent in a jar on your desk. At the end of the month, empty the jar and see how much you saved.

20. Fast food restaurants have long been regarded as recession-proof – the benefactors to the demise of high cost dining in times of economic turmoil. It’s one thing to take the family to McDonald’s instead of Red Lobster just to save a few pennies, but there are some of us out there who should really cut the fast food bit out altogether. The constant inhalation of cheeseburgers, pizza and Chinese food isn’t just ripping through your lower intestine. It’s blowing a hole through your wallet as well.

21. Review your monthly plans for phone, wireless, Internet and television services. Often households are paying significant sums for features that aren’t even being used. That includes everything from digital TV channel packages to wireless voice and data plans. Paying $30 a month for 6 gigabytes of data for your iPhone might seem like a good deal, but not if you’re only using 50 megabytes to check your email and surf the Web occasionally. Also, don’t be afraid to ask for a better deal from your current provider if they want to keep you as a customer – particularly if you subscribe to multiple services and have done some comparison shopping. If long distance phone calls are costing you a fortune, you might want to think about signing up for one of those $5 a month zero-cent per minute long distance plans, especially if you’re currently paying 25 cents a minute on your cell phone.

22. When purchasing household items that are only used occasionally – gardening equipment, ladders, snowblowers, for example – consider sharing with a neighbour. Store the stuff in a mutually accessible shed or garage, and split the cost.

23. Start an entertainment-sharing club with like-minded friends. Meet monthly to pass around books, magazines, movies and music.

24. Try your best to keep yourself employed. Though it goes without saying, it’s the best advice anyone can give you. But with layoffs adding up and unemployment on the rise, there’s no way for everyone to come out of this with their careers still intact. Career counsellors advise that the best way to keep from getting a pink slip in times of economic turmoil is to make yourself indispensable at work. Take on extra projects, preferably high-profile ones your boss cares deeply about.

25. The same career counsellors however advise you to keep up your networks, just in case you do join the growing ranks of the unemployed.

Best Ways to Simplify Your Business

Many business owners own a business because they want freedom and flexibility, these benefits elude them. Simplify your business.

This imbalance can be restored. Most of us would like to live a successful career life in harmony. By making a few changes, you can make the proper adjustments and rediscover the benefits of being in business for yourself and life.

1. Don’t let technology disrupt your work
It is so easy these days to be connected and reached via any method that you prefer. Try to keep track of how long you are actually working without any interruption by technology such as your PC, cell, pagers, iPods, Gaming councils, and other distractions to work.

2. Have great Time Management
This is one of the hardest things to do for people who are in business for themselves. Managing your time is crucial to success. Keep track of how you spend your time. Try to create time slots for certain tasks and projects and stick to it without disruptions.

3. Better get Organized
I can not stress enough how important organization is to success. I find slobs rarely effective and successful. Get organized in your career and life. Stop wasting time. Automate and organize your files on your computer, folders in your office, paper work, and more. Implement structure to stay organized.

4. Create Templates and Structure
Anything that you will need over and over again, create templates for. Create with your logo templates of sales documents, marketing docs, invoices, proposals, contracts, and anything else that you are going to use more than once.

5. Manage E-mail Communication
If you are in business for yourself and/or have multiple businesses, you will need to manage your email communication better. Structure your inbox folders out and create rules to avoid all your emails going into your inbox. Create email templates for frequent outgoing emails and stay organized. Create specific times to check email accounts.

6. Modernize your Bill Payments
By now almost all banks have online banking and almost all vendors allow you these days to pay your bills online. Modernize how you pay your bills it will save you lots of time and money. And let’s not forget it is very convenient and it can be automated. Make time for productivity.

7. Keep Your Bookkeeping Up-to-Date
With software and fairly inexpensive bookkeeping fees there is no excuse for today for bad bookkeeping practices. Get a software to manage frequent entries and if needed look up a local bookkeeping service, it will be worth the investment.

8. Get Multiple Inboxes for Filing
Multiple inboxes for organization to file is a key strategy. I cannot stress how important this is. As information is coming into your life, keep multiple inboxes labeled to whatever serves your life. These boxes will keep information organized until you have had time to read it and file it.

9. Get Professional Advice
Even the smartest business man will tell you that he does not have all the answers. Business owners can be stubborn. Get professional advice to avoid pitfalls and increases chances for success. Consultants can be of great help and very profitable investment.

10. Remember why you went into Business
It’s very easy to get so involved and forget to live. Remember why you went into business. If you burn out and it does not become something that serves you anymore, it is most likely not something you wanted. Keep your vision and goal in mind and make sure you enjoy the ride.