Many frum families are struggling financially now. In a recent poll I took on LinkedIn, 52% said recent tariff policies are hurting them financially. Hopefully, these tariff issues will be settled soon, but financial distress has been a reality for many frum families for years. Some five months ago, in a different poll, 70% of respondents said parnassah is tight, 7% said it is terrible. Rising interest rates and commercial real estate implosion were a big blow to thousands. Many Amazon sellers and daycare owners are facing their time in the hot seat, and other industries are looking shaky now, too.
What are some perspectives to remember when facing recession headlines and realities, too?
1. Hashem Is Here
Even in the event of an imminent economic recession, there’s no reason to panic. There are some ways to prepare and do your “recession hishtadlus” without getting lost in the fear that something terrible will happen. First and foremost, remember that Hashem is in control, both in times of prosperity and poverty, and our responsibility is just to do reasonable hishtadlus. If you truly internalize that, you can be calm and confident that everything is going to be okay.
2. Ignore Hysterical Headlines
The media thrives on hysteria. Whatever the hysterical headlines may be, take a deep breath and add context. Are there real indications that your money world is collapsing? Yes, the economy may slow down to the point where it’s technically called a recession. Some will lose their jobs, businesses will suffer mightily, and require serious assistance. It’s a real challenge and stress for those whose parnassah is harmed, and we all must galvanise for that (a full article is coming on that, BH).
But, even there. Context is helpful. We’re probably not talking about people starving in the streets, an imminent war, depression, and the end of civilization. It’s always good to be aware of what’s happening and to act with seichel to mitigate the risks and challenges of a downturn, but don’t jump to extremes, assume the worst, and panic.
3. General Caution IS Required
This measured approach to challenging times doesn’t mean you shouldn’t be more alert. When the economy is chaotic and uncertain, it is a time for caution. This may include veering away from starting a new business from scratch or transitioning to an unstable job that could fall apart at any time, versus staying at something that works well, even if it’s not perfect.
Similarly, committing to big purchases may be unwise during this period, especially if it requires tapping into savings or lines of credit. There is a time and place for higher-risk/reward ventures and investments, but saving them for when the economy is healthy and stable is probably wise.
4. Strengthen Financial Foundations
A darkened horizon is also a wake-up call to return to the money basics. Try trimming some of your expenses where possible, i.e., where it works for you and your family. Writing down a budget is sometimes all it takes to sharpen focus and avoid overspending. With some extra money in your pocket, you can start building up your savings for emergencies or future expenses, or paying down credit debt that you may have accumulated in fatter times. The stronger your financial foundation, the better prepared you’ll be for the economic storms bound to blow through.
5. Review Your Investment Portfolio
If you have investments, you should also revisit whether the risk you’re currently taking on is a good fit for you. Ask yourself or your adviser if your portfolio is properly allocated and diversified based on your time horizon and risk tolerance. Reassess what you’re invested in and ensure it makes sense for you and your goals. While this kind of review should be done regularly—and unemotionally—using a tough economy as a wake-up call to act can be helpful if you’ve been coasting without a proper plan.
6. Use Down Time to Improve
When times are slow due to clients and customers pulling back, there may be lulls in the workday. But downtime doesn’t have to be all bad; it may be an opportunity to improve skills and/or business operations. You have the time to learn things you never knew, fix logistical issues that should’ve been taken care of, or knock items off your neglected to-do list. That can pay off big-time when the tide turns and you start getting busier again.
7. Be Open to Opportunity
A new side hustle or gig that doesn’t require much money and work upfront may supplement a nine-to-five job or business without much risk. Also, it’s ironic, but attractive business or investment opportunities may arise as others pull back during recessions. Those with sufficient cash reserves can often capitalize and gain market share or purchase supplies at significant discounts. Being “cautiously aggressive” during a downturn may unlock significant bracha too!
Prosperity From Within Recession
It’s reported that the Reichmann family of Toronto turned a distressed market into a massive financial windfall in the late 1970s. The economic world was in shambles, and New York City was on the verge of bankruptcy. With access to cash, a dose of courageous vision, and much siyata dishmaya, the Reichmanns snagged a block of eight Manhattan buildings for bupkes.
There was gloom and doom, so the sellers were anxious to get out. The Reichmanns acquired the buildings for a song, putting just 10% down. As the city turned the corner, rents and valuations skyrocketed, enabling an 800% return on their investment over just five years!
BE”H, Everything Is Going to be Okay
You may not achieve that kind of timing or have that superior deal access, but this is just one example of how a depressed economy can hold tremendous potential. “Hazorim b’dimah, b’rinah yiktzoru“—during economic difficulty and recession, you can plant seeds for the future. By taking advantage of this time to grow your business, strengthen your financial security, and make good decisions, b’ezras Hashem, the future can be bright.
Look Out for Yenem
Looking out for Hashem’s children is a great parnassah z’chus and protection. In this article, we discuss how you might be able to be nosei b’ol and help other yidden during financial upheaval.
BE”H, we should all have b’shefa.