If you spend any time watching the news, you know that many people are fearful that a recession is on the way. While the word “recession” is sure to instill fear in you, it doesn’t have to hold you back from reaching your short and long-term financial goals.
Here are five tips you can follow to prepare for a recession:
1. Review your budget
Before you do anything, review the finer details of your budget to better understand your current financial circumstances. How much are your monthly bills? What is your monthly income? Are there any ways that you can quickly save money?
As you review your budget, you’ll gain a clear understanding of the changes you need to make to prepare for everything a recession could bring into your life.
2. Save as much as you can
It goes without saying, but the more money you save the more comfortable you’ll be during a recession. Be sure that you have enough money in liquid savings so that you can get your hands on it quickly should it be necessary. As your savings grow, your concerns about a recession will ease.
3. Don’t let fear drive your investing decisions
It’s easy to let fear get the best of you when making investing decisions before or during a recession, but you must keep a clear mind. You know what you should and shouldn’t do, so stick with your plan. Never let fear drive your investing decisions as you’ll look back and realize that it was a mistake.
4. Eliminate debt
Depending on your financial health, do your best to eliminate as much debt as you can. Doing this before a recession hits is in your best interest, but you should continue to take action for as long as possible. There’s no better feeling than paying off a balance in full.
5. Consider a side gig for extra income
Even if your primary income has you feeling comfortable, don’t let that stop you from considering a side gig. Find something you love and look for a way to turn it into extra money. Even if it’s only a few hundred dollars per month, you’ll soon find that it will come in handy.
Answer these questions
What do you think about these tips for preparing for a recession? Can they help you survive and even thrive during this time of uncertainty? Would you add any other tips to the list?