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1ON1: Rachel Caballero of Truwest Credit Union breaks down budget basics

Rachel Caballero, TruWest Credit Union community development director
Rachel Caballero, TruWest Credit Union community development director, offers tips to help Arizona households curb negative household impacts to an economic downturn. (File Photos/

Truwest Credit Union offers ‘recession proof’ approach to households

By Terrance Thornton | Digital Free Press

No matter where you turn, across every medium, financial reporting outlets are suggesting a dark cloud forecast based on rising interest rates, an overheated housing market and skyrocketing inflation.

Is the United States economy headed to a recession? No one has a crystal ball, Rachel Caballero of TruWest Credit Union contends, but she says smart financial decisions can make a difference during uncertain economic times.

At TruWest Credit Union, Ms. Caballero is the community development manager, whereas the credit union has eight branches here in the Phoenix metropolitan area. To better understand what consumers can do now to curb household impacts of an economic downturn, the Arizona Digital Free Press reached out to Ms. Caballero. This is what she had to say:

*Can you give our readers a technical definition of what a recession is?
A recession is a significant decline in economic activity for several consecutive months, generally identified by a fall in gross domestic product.

*When one goes to consider a household budget can you break down the 50/30/20 rule?
The 50/30/20 rule is a proportional budgeting system that divides your monthly income into different categories by percentage. The percentages devote 50% of your monthly income to needs like shelter, food, and utilities, 30% to wants like subscriptions, entertainment, and travel, and 20% to savings like emergency funds, retirement, and personal savings goals. If you find that your needs are greater than the 50% allocation, you will need to adjust the percentages, sacrificing some of the wants to fulfill your needs.

*Establishing passive income can oftentimes be a long-standing effort. Where does one start?
Passive income is often perceived as earning income without having to work for it. That’s not really the case. You have to start by putting in a bit of work to get to the point of earning passive income more freely, and continue to put in work for the money to keep coming in. There are multiple ways to earn passive income from writing a book to using your love for photography to start a business to investing. No matter what your form of passive income, you will want to start by outlining your plan of action. How much money it will take to start? What will the ongoing time commitment look like? How are you going to sustain the project?

*What are key factors about any budget that helps make it recession proof?
One of the key things to consider about a budget is that it needs to be personal and evolve over time — it can and should adjust with your current finances. It isn’t about depriving yourself; it’s about taking control of your finances. A few ideas that can help you make your budget more recession-proof are:

  • Reviewing it on a regular basis to keep up with any adjustments in debits and credits,
  • Regularly reviewing recurring charges and payments to see if anything can be lowered or canceled,
  • Getting down to the basics and stripping plans and subscriptions down to the minimum to save money.

*How can a household minimize its expenses?
Minimizing household expenses doesn’t have to be a stressful task, but it is an important one during a recession. One of the easiest ways to minimize expenses is by adjusting wants to focus on needs. You can do this by:

  • Spending more time doing activities at home and decreasing spending on out-of-home expenses. Doing movie nights at home, playing board games, and taking advantage of free community activities can be a good start.
  • Reducing the amount you spend eating out or ordering take out and eating more at home;
  • Taking advantage of store sales, couponing, and bulk food purchases can also help minimize expenses.
  • Reducing unnecessary subscriptions,
  • Reducing phone and internet plans,
  • Reducing your utility use by adjusting the thermostat,
  • Reducing water use,
  • Cooking without the use of a stove or oven can also aid in reduced household expenses.

*What is the No. 1 consumer rule during tighter budget years?
Tighter budget years all start with an adjustment in your mindset. Adjusting your habits and focusing more on adhering to a tighter budget will be much more successful if you have a positive and strong mentality about why the changes are necessary and outlining positive outcomes because of the shift. Getting every member of the household to come together on this will help reduce the chance of an individual not adhering to the adjustment and can be a great way to solidify positive money behaviors, ongoing.

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