Every time economists have those long discussions about deflation, what they are referring to is that point when prices go down. As a regular consumer, deflation probably wouldn’t bother you that much, unless it comes with income deflation.
But, things are a bit different for the economy because it will only grow if there is a modest amount of inflation. When you know and feel how bad the economy is, it is easy to avoid spending more than what you need.
However, there are actually a few things that you might want to consider buying if there is an ongoing recession.
Yes, buying a car in a bad economy makes sense because you can take advantage of some great deals. It doesn’t matter if you will buy a used or a brand new model because you can be sure that there are amazing interest rates and incentives that await you.
Instead of waiting until the economy recovers before you buy that dream car, now is the best time to do it. These wonderful deals won’t be around for a long time because a recovered economy will mean higher interest rates and prices.
Furniture prices tend to rack up. When the economy is bad, salesmen will be more than willing to earn less commission as long as they score a sale. Rather than markups of 75% up to 100%, furniture markup can go as low as 20% to 30%. If your bedroom can use a new bed or if the couch in your sofa is in dire need of a replacement, buying while the economy is bad is one of the best decisions you can ever make.
When your finances put you in a better position to purchase a house, then, you might want to consider doing it when the economy is having a hard time. On the other hand, if you are not yet ready to make that purchase, you might be better off with refinancing.
Stocks are great to consider during a bad economy. A downturn in the economy leads to more stocks put up on sale, giving you the chance to find some good bargains. There are indeed lots of stock possibilities during a recession, including some stocks that can help you gear up for what will come soon, and that is, inflation once the economy gets better.
A bad economy is also a perfect time for buying stocks that pay dividends. And if you are keener on returns that go on for long-term, you can get the best deals with index funds.
Obviously, if you don’t have plans to buy any of the things above in the next one or two years, it wouldn’t make much sense to get all too excited to rush out and buy. It is never a wise idea to buy just for the sake of buying. However, if you already have plans to make some of these purchases in the near future anyway, it might be worth it to try moving your timetable up if possible.