Six Great Recession lessons that are still applicable today

The Great Recession demolished jobs across the U.S., but it did provide valuable lessons that might help manage your finances during the coronavirus-related recession.

1. SAVE WHAT YOU CAN.

Even a small emergency fund of $500 can prevent you from falling into debt/ If you’re still employed, “pay yourself first,” said Samuel Deane, a financial planner at Deane Financial in New York.

“Even if it’s $20 every time you get paid, make sure you put that $20 away first and then live your lifestyle with the remainder.” Automate it with direct deposit if you can.

If you’ve lost your job, saving will obviously be tougher. Apply for unemployment if you qualify, and contact your landlord, creditors, area nonprofits and family members to seek relief. If you’re still employed but have had your salary cut, consider a side gig and work on trimming expenses.

2. THINK TWICE BEFORE REJECTING JOB OFFERS.

Amanda Grossman, now a certified financial education instructor in El Paso, Texas, made compromises after being laid off as a market researcher in Florida in 2008. She took a career counselor’s advice and relocated to Texas for a lower-paying job in the environmental industry.

“[The counselor] said, ‘Look, the economy is not doing well. You need to take that job, it’s going to keep going down; you’re not going to be able to find work,’” Grossman said.

If your sector is hurting and unemployment benefits or savings are lacking, even a less-thanideal role can help you ride out a recession.

3. GET SMART ABOUT MONEY.

You’ll find a myriad of financial literacy resources online and at your local library, assuming it is open and safe to visit during the pandemic.

I struggled to save money on a lower salary. Credit cards became my emergency fund. I don’t recommend this approach, but times were tough. Had I learned about financial hardship programs, student loan repayment options or balance transfer credit cards, I would have saved heaps on interest and ditched debt faster.

4. ESTABLISH MULTIPLE STREAMS OF INCOME.

Grossman said she had other goals. “I’ve always wanted to be a writer and I love, love, love talking about money,” she said.

While she was unemployed in Florida, she launched the blog “Frugal Confessions.” She learned new writing skills from books and sought feedback from editors at newspapers. In 2013, she left her environmental job in Texas to run her blog full time.

5. PROTECT YOUR CREDIT — BUT PROTECT YOURSELF FIRST.

In a crisis like COVID19, many normal financial rules don’t apply. You may need to carry a credit card balance to buy groceries or address an emergency. You may need to make only the minimum payment to cover rent. You may even need to contact your card issuer and ask for relief options like payment deferrals.

Even with three jobs, I struggled at times to make the minimum payments on my credit cards due to high balances and interest rates. I never defaulted, but I did stress and scramble over it. I wanted a record of on-time payments and the good credit they build so that I could qualify for future low-interest rate offers.

That’s a worthy goal, but in times of emergency, prioritize getting back on your feet first. Once you do, you’ll have time to address your credit scores.

6. MAKE CALCULATED MONEY MOVES.

Eventually, I left my apartment and moved in with roommates. I also read the post-recession climate and, in successive jobs, learned how to ask for a raise. Every year that my workload and responsibilities increased, I made a case for a higher salary. Asking is uncomfortable at first, but it gets easier. The extra money eventually paid off my debts.

A recession’s impact is largely out of your control, but your reaction isn’t. With strategic steps, you can insulate yourself and create new opportunities.