6 Key Principles of Personal Financing: A Guide to Surviving the Recession

recession 2022

Do you remember the great recession of 2008 when the subprime mortgage crisis, starkly falling stock market, and crashing real estate industry instigate huge losses? It took the world over two years to recover from the damage. And, once again, the recession bells are ringing.

Experts fear that driven by the COVID pandemic, Ukraine war, food, fertilizer, and energy shortages, the Recession 2022 would be like no other in the history

But, the long-anticipated recession is just starting, and for surviving this brutal financial downturn; you need to manage your personal finances very wisely. 

So, here are disclosing six of our top favorite personal finance tips and tricks that can help you thrive during the recession 2022:

Tip1: Save Before You Spend

What is saving?

Income – Expenditure = Saving

It’s a simple concept! But did you know money experts follow a different path? The ideal rule for them is to set aside what you have to save first and then spend what remains (Income – Savings = Expenditure).

But, in reality, most of us follow the reverse process. We spend first and save what little is left (if any) at the month’s end.

However, adopting the ‘Save Before You Spend’ mindset can help you save more than your goal and make every dollar work to your advantage.

Tip2: Get Paid Your Worth

Who wouldn’t love to be paid for their skill, time, and energy at work? But, it turns out a majority don’t get appropriate compensation as per their roles and responsibilities.

But, negotiating your salary to get paid what you are worth can be daunting. So, here are top three expert-vetted tips to help you gain the confidence you need to know and get paid your worth:

  • Conduct extensive market research to understand what talents with your skills and job role are usually paid
  • While quoting your revised pay, discuss what you can offer 
  • Always negotiate with facts and not emotions

Knowing your worth and constantly working towards increasing it is a vital step towards your financial stability and job satisfaction. 

So, take advantage of the change and ask for what you deserve!

Tip 3: Start Early

When you are in your 20s, it might seem like you have years left to start saving and investing for your future. But you couldn’t be more wrong.

By starting your financial saving and investing journey in your 20s rather than your 40s, you’ll have significantly more money by the time you go off the market. 

Here are a few reasons why you should start while you still young:

  • Compounding growth will give your savings a colossal boost
  • You can weather unexpected market events
  • Improves your risk-taking ability
  • Support your retirement plans

Yes, saving and investing at the earlier stages of life when you don’t have much in your wallet can be difficult. But, you can always start with smaller amounts. 

Tip 4: Build an Emergency Fund

An emergency fund is a sum of money you should set aside to handle any unforeseen financial setbacks. These funds serve as a safety net, guarding you against unanticipated, uncalled-for expenses such as:

  • Unexpected medical expense
  • Major car fixes
  • Home appliance replacement or repair
  • Unemployment

An emergency fund will keep you afloat in difficult turmoils without relying on high-interest loans or credit cards.


But, how much should you save for emergencies?

Typically 6-12 months of your monthly expense is the ideal size for an emergency fund. However, having even $1000 saved initially can help you get out of several financial scrapes. 

That’s why, if you don’t have an emergency fund till now, put away something right now and start building your financial safety net over time.

Tip 5: Time Value of Money

Nothing explains the importance of the Time Value of Money better than the old adage, “A dollar today is worth more than a dollar tomorrow.

The concept is straightforward. Time can either work for or against your money. While in a period it works against your debts, it can also increase the value of your investments in the same course.

Every dollar or liquid currency is losing its value. The Consumer Price Index is the breathing proof of it. 

For instance, if you are investing $200 monthly that grows at a compounding rate of 10% annually over 40 years, you’ll end up with over $1.25 million at the end of four decades. Whereas, if you set aside this same amount for the same period without investing, you’ll be left with only $96,000.

Therefore, be an intelligent investor and always calculate the time value of assets before investing.

Tip 6: Get Started Now

The first step towards any journey is probably the toughest. 

Since you are reading this article, chances are you are taking your crucial time out to conduct proper research and be equipped with all the knowledge before implementing the most valuable strategies for your finance management.


Well, there is no perfect method of personal finance. In fact, what might work for some might not be so fruitful for you. But, there’s no way to know other than getting your hands dirty.

Planning is essential but don’t get caught up in there forever. After all, eventually, the boots must meet the road.

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