Anything else you might need to finance
Houses and cars are the results of big decisions, but there are many other big-ticket items, such as furniture, a deck, a computer, and a backyard pool. Many of us can’t afford that without financing, and now is definitely not the time for that, unless it’s an absolute necessity.
“It might be a good idea to steer clear of any big purchase that would require you to commit to ongoing payments or even access your cash reserves, even if it seems like you’ve caught the best deal ever,” Hamilton concluded.
“These deals might seem very tempting, especially when stores are so desperate to get customers in, but having cash in your bank when we’re dealing with a recession is far more valuable.”
Extended Warranties
You might not be able to avoid a huge purchase like a car or a refrigerator, even when money is scarce. Then you have to deal with another decision: for only a couple of dollars more, you might buy an extended warranty that will protect you from any kind of unexpected repair costs.
The peace of mind is also tempting, but in most cases, the warranty is only a waste of money. Consumer Reports decided that more than half of car owners who bought an extended warranty never even used it.
Excess groceries
Food is absolutely essential, but do you really need to buy everything in that grocery cart? “So many consumers buy food only on impulse, and most of the excess groceries end up in the trash.” as Andrea Woroch, savings expert and contributor to “Today”, “Good Morning America”, and CNN, explained.
Name-brand anything
If you love shopping for name-brand items, a recession is a perfect occasion to break that habit. Food is definitely the perfect spot to make the switch. “There are many great-tasting generic and store-brand items available, and the prices on brand names are sometimes astronomical.” as Woroch explained. Another place you should consider scaling your passion for pricey labels is when it comes to clothing for kids.
Bulk buys
We all love bulk shopping, especially if it’s for the sake of saving more money, but experts warn that this tactic doesn’t make a lot of sense during a recession. “Apparently, this seems to save you more money, since a dozen cans of beans might be less expensive than buying individual units.” Dennis Shirshikov, a senior financial analyst with Fit Small Business, declared.
Silver and gold
When times are difficult, people are tempted to invest their money in precious metals, as they believe to be a hedge against economic uncertainty. However, if you’re struggling to pay for other amenities, new investments, even those that were well-intended, are ill-advised. So it’s best to keep your money in your pocket, especially now.
If you enjoyed reading this article, we also recommend reading: 5 Times You’re Right to Be Frugal!
