SURVIVING A RECESSION – THINGS TO DO

Today’s piece is not on dividend or any other accounting term. This piece is in response to happenings in Nigeria, and other parts of the world. Well, accountants are social beings too, and we are also affected one way or the other by the happenings. The Central Bank of Nigeria (CBN) recently succumbed to using the word ‘recession’ to describe the Nigeria economy, even though the writing on the wall has suggested so for so long. The drop in the price of crude oil which has starved the country of needed foreign exchange, coupled with the renaissance of militancy in the oil rich Niger Delta region have put the economy in comatose with the Buhari-led government trying so hard to keep things in shape.

Recession is a period of temporary economic decline during which trade and industrial activity are reduced, generally identified by a fall in GDP in two successive quarters. The second quarter is almost rounding off already, and there are no indications that things are changing rapidly. So, Nigeria is heading to recession, if we are not there already. What can we do in these trying times? I have taken some time to do some soul searching and research, and I have come up with the following points:

• Spend less, save more: This is the best time to preach contentment, especially to people with inflated lifestyle. Only buy what is absolutely needed. You need to save more than before. Splurging on clothes, bags, shoes, and other things can be put on hold at least till when the economy start showing signs of resurgence. This is no time for frivolous spending.

Common mistake made by salary earners, is that when they receive salary, they pay all their expenses first before planning to save and always end up not having any to save. I encourage you to do the reverse. Save first out of your income, and then plan your expenses on the remaining amount with you. Do you have an emergency savings? It is recommended that one should have six (6) months worth of salaries in emergency savings.

• Reduce or get out of debt: At a time like this when the purchasing power of every naira has dropped, you do not want to be servicing your debts with money that can barely feed you. Now is the time to get out of debt. And if you are not in debts, do not even think of borrowing. You need every naira that you can get right now. So, stay contented with whatever you have and do not push further stress on yourself and your money.

• Keep your job as long as possible: Do not take your job for granted at a time like this when companies are on a sacking spree and some are pulling out of the country. If it means getting to job earlier than before, being more courteous to your bosses, being extra diligent with your job, then you have to do it. You need to keep your job! 

And if you ever lose your job, which is always hard for anyone to deal with, then you have to brace up and find something doing until you get the job you prefer. Taking a teaching job, working as an assistant or anything else that is legal and bringing in money. One will need to deal with ego at this juncture.

• Increase your sources of income: With cost of living on the increase, having an extra source of income will act as a buffer. This can be done over the weekend or during the late hours after close of work during the week.

They say desperate times require desperate measures. As we brace up for recession, we need to carefully plan and put things in order for us to sail through these times. 

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Written by Abayomi Samuel.