3 Ways to Make Extra Money in a Recession
April 25, 2008
Cash shortages are common during a recession. What similarities do you notice in the cycle below:
- Consumers Spend Less Money
- Businesses Earn Less Money
- Businesses Stop Hiring/Start Firing
- Laid off Consumers Spend Less Money
When the economy stops expanding there is less money to go around. Everyone tries to get more out of less. We pay less for products and services and then try to extend their useful life. So how can you tap into this trend to make extra money during a recession?
Help People Extend Product Life
One way people will be looking to cut costs is to buy fewer things, which means making what they currently have last longer. Chances are you know more about a particular product or service than the majority of people in your town, or even the whole country. You can make money helping people extend it’s useful life, saving them money.
If you can offer information, consulting, or repair services people looking to save money will find you. Don’t think people will pay you for that kind of information? Check out the following example.
There’s a person that offers a whole series of booklets (EZ Battery Tip) on how to renew old Nickel Cadmium (NiCd) batteries on cordless power tools for brands like Craftsman, Ryobi, Porter Cable, and Bosch. These batteries are not cheap to buy new so people are happy to find a way to reuse their old ones. This person has sold thousands of these booklets on eBay, with 99.8% customer satisfaction; check out some of the feedback from buyers:
- The instructions really work; saved a fortune on Bosch drill batteries
- GREAT info! well worth the bid
- great investment great ebayer
- good info worth the money thanks
- It really works! I saved alot of $
- SUPER, worth the price
If you have experience that can save people money, they’ll reward you for it. What area are you an expert in? You wouldn’t have to sell your expertise online; you could setup a local operation repairing items in your town instead.
Teach People to Save Money
Maybe you don’t know how to fix things but are great at cutting costs. Start a website or hold local seminars, teaching people how they can save money. Maybe you have techniques for saving on gas prices, insurance, automobiles, housing, energy, taxes, clothing, or grocery bills. You might think some of these things are common sense but to someone who’s not familiar with having to live with a fixed budget, they may be valuable lessons.
Take a look at Fiona Lippey, the Simple Savings lady in Australia who’s built a huge resource for people looking to save money. Some people use it for free but others pay money to access the entire library of money saving content. Again, to a frugal person like me this might seem like a waste of money but for some people it’s just what they were looking for. If money is tight and the membership can save them more than it costs then they’re happy to sign up.
Look a little closer to home, remember America’s Cheapest Family? They wrote a whole book about how to save money; I bet sales will surely increase as more people look to save money during a recession.
While a habit of being thrifty may be scoffed at by some in times of prosperity, when the economy turns and people lose their jobs, suddenly the skill of being able to make dollars stretch farther becomes very valuable.
Sell for Lower Prices
When people have less money to spend, they’ll look for alternatives to retail prices and turn to places like eBay, Craigslist, or garage sales for bargains.
If you have a knack for finding good deals you can turn around and re-sell the things yourself to make some extra money. Obviously the benefit of selling them online vs. garage sales is that you can reach a much wider audience of potential customers on the Web. Of course, if you’re not comfortable with selling on eBay there are options such as garage sales or flea markets.
The risk of this option may be the highest of the three since you’re taking possession of products and aren’t guaranteed to get your money back. The way to mitigate that risk is to only buy things for re-sale if they’re a really good deal and you have a high level of confidence (based on numbers not a gut feeling) that you can re-sell them.
Of course, if money is tight you might not have extra cash to buy things with. In this case you could always start off by selling your own stuff to raise some initial funds.
Just remember, the economy tends to move in cycles and recessions don’t last forever. Even if these things sound like more work than they’re worth, keep in mind you don’t have to do them indefinitely.
The goal here is to make extra money during a recession to help keep your finances in order while the majority of the country is struggling through a bad economy. Things will eventually get better and then you can decide whether to keep it up and continue making extra cash or to take a load off and enjoy the long-awaited economic upswing.
Think about the different ways you have to make more money in a bad economy:
Make sure you also read how you can make money from a down real estate market and profit from the falling US dollar and be sure to stop back tomorrow to check out the best gas credit cards to save you money at the pump.
All posts by Ben Edwards