Spending You Should Not Cut, Even In a Recession

These days, everybody’s looking to save money. And with good reason—the more you can cut back on monthly expenses, the better prepared you’ll be to weather the recession, including the frightening prospect of losing your income. That said, there are a few things to which you should continue to allocate money as long as you possibly can.

Health Insurance

It’s so critical to have health insurance, even if you’re young and healthy. An accident or sudden illness could put you in tens of thousands of dollars of debt. Worse, you could find yourself unable to get the health care you need to get better. If you’re currently employed and chose not to participate in your employer’s health insurance, reconsider it. If you’re not employed, find a way to buy your own low-cost health insurance plans (you can search hundreds of plans at Even a bare-bones plan that will protect you if you face a catastrophic accident or illness is better than nothing at all.

Retirement Savings

When times get tough, a lot of people stop contributing to their 401(k) or IRA plans, especially this year when so many employers have stopped matching 401(k) contributions. Unfortunately, that’s short-sighted. The younger you are, the more valuable your retirement contributions are, because they will earn compounding interest for decades to come. Plus, the stock market is on sale these days—there hasn’t been a better time to buy stocks in a long time. Continue to contribute a minimum of 6% of your salary to your paycheck to your employer’s 401(k) or, even better, open a Roth IRA.

Education and Training

Your education and job skills are you most valuable asset. Unfortunately, I’ve heard stories of students dropping out of college because student loans fell through or they lost the job they needed to pay for school. Obviously, there are times when pursuing your degree simply isn’t affordable. But you shouldn’t let this recession deter you from accomplishing your educational goals. Use every resource available to you to find a way to pay for education and training programs that will increase your lifetime earning potential.

Healthy Food

When money is tight, it’s easy to become preoccupied with keeping a few dollars in your pocket and lose sight of other goals like eating well and staying fit. Although it may seem like a $0.99 hamburger is the cheapest way to get lunch, you’ll pay a dear price for those cheap meals if you make it a habit. Learn to eat healthy on a budget, and find other ways to save before giving up on buying healthier foods.

What About You?

Are there areas in your life that you refuse to cut back on? What are they, and why do you feel they’re important to keep up even in tough times?

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About David Weliver

David Weliver is the founding editor of Money Under 30. He's a cited authority on personal finance and the unique money issues we face during our first two decades as adults. He lives in Maine with his wife and two children.


  1. Wow…I never thought about this. I’ve been trying to cut everywhere possible but I think this discussion is really important. Thanks,

  2. Yeah, should spend on the “need” item only. I will spend on cloth and house also.

  3. Well it depends on your situation, for me living at home, it has become a priority now to save as much as I can, develop a proper budget, make more income and start a business.