Economic Recession? What's That?

Hi, Friend Attitude! In the past few weeks, you must have often heard the word recession, right on social media, news, or discussions with your friends. But, what exactly is an economic recession, pal? From many definitions, an economic recession can simply be interpreted as a condition in which a country's economy is deteriorating as seen from a negative Gross Domestic Product (GDP), rising unemployment, and negative real economic growth for two consecutive quarters.

Well, friends, you must know that now the impact of the Covid-19 pandemic has significantly changed people's habits so that people's social activities are now limited (social distancing). As a result, my friend, economic activity began to be disrupted and resulted in weakening purchasing power and an economic slowdown. Then, what are the effects of the economic recession?

  • The economic slowdown will make the real sector hold back its production capacity so that layoffs will occur frequently and even some companies may close and no longer operate.
  • The performance of investment instruments will decrease so that investors tend to place their funds in safe forms of investment./li>
  • The increasingly difficult economy will certainly have an impact on the weakening of people's purchasing power because they will be more selective in using their money with a focus on meeting needs first.

The Covid-19 pandemic that we are currently facing is one of the triggers for economic recession in several countries. In fact, this has caused the unemployment rate and the number of poor people in various countries to also increase as a consequence of the sluggish economy. Now the question is, are you ready if our country has to face the worst possible economic recession? So, are you ready or not, we still have to be prepared, my friend, if this bad scenario happens and hits our country's economy, even though we always hope that the best scenario will happen.

Then, how to prepare our financial condition in order to minimize the impact of the possible economic recession? We have some tips, my friend, that you can do, check it out!


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  • Remember the 10-20-30-40 financial planning formula? Yes... make sure 20% of the funds you use for investment are allocated for emergency funds in highly liquid instruments and disciplined to prepare them. The bigger the proportion, the more prepared you will be in meeting your needs in the midst of an economic recession. Keep in mind, my friend, this is very important because you could lose your job because the company where you work is closed.
  • Begin to reduce and not increase expenses such as debt, if possible then pay off immediately or if it is still very heavy then immediately negotiate an application to the financial services institution for restructuring. Don't take debt lightly even if it's only from a credit card because you won't know your financial condition when the economic recession hits.
  • Look back at your investment portfolio, if global market conditions have started to decline then immediately rearrange your investment portfolio into a safer form such as gold.
  • Live properly and don't panic, buddy! Continue to consume as usual because this can help the economy continue to grow. Remember that public consumption plays a big role in our economic growth! However, you still need to be committed to a financial plan by still setting aside money for savings and investments and putting needs first. Reduce purchases of things that are not really needed, especially if they are only short-term pleasure BIG No..!!! Use your health insurance facility if you have to go for treatment so it doesn't interfere with financial liquidity.
  • Pay close attention to the latest developments in economic conditions and start taking advantage of opportunities around you that can have economic value. Don't hesitate to start a small business if you feel your financial condition is still weak, because you obviously need additional income to support your family's finances. Remember the scientist Albert Einstein "in the midst of every crisis, lies great opportunity"

Stay optimistic, my friend, remember that recession is part of the business or economic cycle, however we must go through it and make a recovery as soon as possible. Believe me the storm will pass, because the rainbow will appear after the rain, right?