IRVINE, CA / ACCESSWIRE / November 27, 2022 / Managing debt in the shadow of a recession can be a daunting prospect. While it is considered a best practice to pay down debt before a downturn takes hold, there is also significant value in keeping capital on hand for tough times. "When a recession is looming, maintaining a balanced financial approach is key to enduring any turbulent period that might lie ahead," says Nick Kohlschreiber, founder of AcuFi. "Consumers will also benefit from creating a plan to manage their debt during a recession so they can face the challenges with a positive outlook."
As the nation grapples with record-breaking inflation, economists are concerned that a recession is the next logical step. In fact, given the definition of a recession as "two consecutive quarters of negative gross domestic product," one has already technically taken hold. With the prices of goods and services rising and the value of the dollar weakening, those already in debt are in what could be considered a precarious position. However, all does not have to be doom and gloom, according to Nick Kohlschreiber. There are several tactics that can be employed to weather a recession - or the threat of one - and they involve taking steps toward debt relief.
To begin with, consumers should take full stock of their financial circumstances and assess which debts have the highest interest. From there, they can prioritize paying down high-interest obligations to decrease the overall amount they will have to part with. In the case of many consumers, credit cards can be a key place to focus on as these currently have an average variable rate of 18.1%. Another area to consider is personal loans, mortgages, and auto loans with fixed rates. Borrowers can work with a financial advisor to create a plan to pay down such debt based on their spending and budget.
Those who lack the funds to repay their debt before or during a recession still have options. "Such consumers should consider working with a financial advisor or a debt counselor who can guide them through debt consolidation and settlement options," Nick Kohlschreiber explains. "Consolidation can be a great way for individuals to make a fresh financial start as they implement a plan to pay creditors based on a realistic budget." Credit counseling services can also provide a new perspective for those swamped with debt and offer strategies for repaying creditors on their behalf. It is important to remember that these services typically charge fees, which should be factored into a person's budget.
Above all, consumers should not panic. Regardless of their situation, creating a solid financial plan can help them stick to their budget and repayment schedule whatever the economy may be doing. People in debt may need to make certain adjustments, like spending less or saving more in the meantime, but their financial plans should also be a guide to how strictly they need to abide by the prescribed actions. While recessions can be impactful, they ultimately come to an end, lasting only 11.1 months on average. People in debt may take comfort in the fact that even though their approach to debt relief may need to change, the pain will not last for long, and the result will be improved fiscal discipline and greater financial freedom.
AcuFi is a debt resolution firm dedicated to helping consumers negotiate or settle unsecured debt with creditors. It is committed to providing transparency for all debt relief options so that its clients can understand the debt settlement process and move through it smoothly. AcuFi advocates on behalf of the consumer, not the creditors, with a dedicated team of experts available to work with individuals as they pursue debt relief through a personalized plan.
Nick Kohlschreiber, Founder of AcuFi, Teaches Small Businesses to Use FinTech: https://www.yahoo.com/now/nick-kohlschreiber-founder-acufi-teaches-220000221.html
Founder of AcuFi, Nick Kohlschreiber, on FinTech in Developing Countries: https://www.yahoo.com/now/founder-acufi-nick-kohlschreiber-fintech-031000118.html
View source version on accesswire.com: