One of the biggest effects of recession is unemployment. USA is currently facing more than 9% in unemployment rate and its set to reach double digits even before the end of the year. Some stats in the country are already beyond the double digit unemployment rate and others might soon follow.

Unemployment during recession is simply caused by the inability of companies to post any profit. Because they can’t attract clients since everyone is saving for recession, they don’t have enough profit that will enable them to retain certain number of employees. They have to terminate some of their employees just to survive recession.

But those left behind should never feel comfortable. They may have been promised that they will still have their job even in recession but that doesn’t mean they will enjoy the same benefits. Salary reduction is practiced by companies across industries since they don’t want to terminate their employees. Many employees are amenable to this solution since it’s still better to have a job with less salary rather than ending up in the street looking for a job.

If you still have a job, you need to prepare for possible salary reduction. This may not happen but it still pays to be prepared.

Planning Your Finances

The first thing that you should do in order to prepare for salary reduction is to consider your current financial situation. Review your monthly expenses and determine which ones should be discontinued if the dreaded salary reduction happens in your career.

This is also the perfect opportunity to plan for money saving techniques that should be implemented in your home as soon as you experience salary reduction. While this might sound scary or a bit paranoid, listing down what you can cut off because of inability to earn as expected should help you cope.

Taking Care of Debt Fast

This technique has been recommended for those who are about to retire. Since their retirement benefits will not yield the same salary as they used to have, it’s better to be aggressive about the outstanding debts so that they should be paid as early as possible.

Spend your extra savings on paying off your debt so that you’ll never be hounded by collectors because you’re unable to pay them on time. If you have established a good paying record with your debtor, you should be able to ask for leniency or arrange another payment scheme.

Seeking Alternative Source of Income

If you really want to maintain your lifestyle even with salary reduction, you need to look for ways to fill the financial void. This means you need to look for a 2nd or 3rd job just to purchase the things you want or pay for your preferred services.

Be careful: working too hard just to earn some extra cash can have drastic effects in your body. You may be keeping your current lifestyle but you could end up in a hospital which will cost more than what you earned from the 2nd job.