What It Means And How To Prepare – The Organization for World Peace

Have you noticed that the prices have risen sharply? You can answer this question with “obvious”, and rightly so. To compare prices from less than five years ago to today, there was a huge price increase, but why? This is probably due to the upcoming recession, which is keeping everyone in suspense. In this article, I’ll look at what a recession is, why it’s coming, and finally, how to prepare for it.

First, let’s define what a recession is. Economists define a recession as a period of economic decline due to a lack of consumer spending. In response, companies cut costs and laid off employees, leading some companies to file for bankruptcy. The definition gives a very brief reason why a recession is happening, but as to why a recession is happening, economists are unsure but attribute it to the rise in inflation during the Covid pandemic. ABC reports that in the US, some economists are arguing that the $5 trillion stimulus package sent to citizens is now causing problems. Due to a lack of work and therefore a lack of income, the Covid pandemic led to a significant drop in consumer demand for shopping. The stimulus allowed consumers to buy products again, but with the Biden administration overestimating market demand, the market barely recovered. However, the President insists that this is not the cause of rising inflation and that the supply chain and companies are to blame. This is most likely true of Canadians, but the US recession has been blamed on how the Federal Reserve has handled the Covid pandemic. News sites are reporting that a Canadian recession is looming in the first half of 2023, but what should we do to prepare for it?

To prepare for a recession, CNBC shares six financial steps you need to take now to help you in the year ahead. The first step is to stretch out every dollar if you can. This may include (and in my case most likely includes) the pizza you ordered, which takes three days instead of one. The second step is to review your spending and cut back on expensive and unnecessary things. The third is to cut credit card spending because of interest rates. The fourth step is to deposit funds into your savings/emergency account. The fifth step is to invest smartly if you are interested in the stock market. Finally, the sixth step is to invest in a Roth IRA. The Roth IRA differs from the IRA in that the former involves paying taxes at a lower rate and therefore if you need to withdraw from your retirement fund it would be during a high tax bracket. In short, until next year, reduce unnecessary expenses and save your money as much as possible.

A recession is unfair and will hit those with less money harder than those with more money. The minimum wage is already unaffordable, and a recession will only make it worse. If you have the opportunity, help those worse off than you and look for mutual aid programs in your area. The more everyone helps each other, the easier this recession will be for everyone.