The best lessons are those taught during the darkest moments of our lives. That is why with the economic troubles of recent years, there are bound to be a lot of realizations and learnings along the way. As we all struggled to grasp the unemployment, mounting debts and other financial difficulties, we were faced with various lessons about how we should have been living our lives.

One of the most prominent involves an emergency fund. The standard of 6 months worth of funds is no longer valid. Even those who had that amount of money were not spared the hardships that this particular economic crash brought. Evidently, we now need to save up for is a year’s worth of emergency fund. It is not just about losing your job but the difficulty of finding a replacement source of income.

Another lesson that should have been learned is to not put all your investments and financial sources in one basket. If you have more than one source of income, you have more chances of surviving another recession - should it hit once more. If you lose one, there is another steady source that will provide you with the means to live - without using up all your emergency funds.

Learning to live within our means is another valuable lesson in years past. Some call it being frugal and they immediately turn away from the idea. But did you know that frugality is a friend of financial freedom? It is not about depriving you of the finer things in life. It’s all about looking for the most cost efficient alternative or waiting to purchase something until we can afford to buy them in cash.

For instance, the term staycation became very popular recently. It refers to going on a vacation, without necessarily having to leave travel to achieve the feeling. Another example is learning how to bargain when buying things. Do not hesitate to ask for discounts before you purchase so you can save up a couple of dollars in the process.

The most hard hit of us are those who got used to spending through their credit cards - which in essence, allowed us to spend despite the lack of cash to pay for things. When the recession hit and they lost their jobs, they had no means to pay for the accumulating credit card debts - not to mention their other debts like mortgages, car loans, etc. Living within our means is a habit that we need to form in order to avoid such financial difficulties in the past. Credit cards are great but if you do not know how to use them, you may find yourself in a deep pit of debt when another economic crisis hits the country.

We developed a very bad habit of relying on future income that has not even arrived yet. If certain circumstances affected that future income, we find ourselves unable to afford the lifestyle that we got so used to. We feel defeated, frustrated and disappointed. These negative feelings rob us of the motivation to rise up from the slump that we are in.

Ultimately, the recession taught us a lot of valuable lessons on how we should be managing our finances. It’s not even about having another recession that should scare you. It can be any situation that involves a lot of money or render you unable to work - like an illness for instance.

The greatest lesson here is to make sure we are not put in the same financial situation again. Being prepared goes a very long way.

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