Although there may be signs and expert opinions, there’s no way to predict with absolute certainty when another recession is going to happen. However, there are steps you can take so you’re as ready as possible when it does. Here are some tips for preparing for a recession.
PAY OFF DEBT
Come up with a plan to start paying off as much debt as possible. An emphasis should be placed on your higher interest rate debt as this will help save you money in the long run. If you aren’t sure where to start, click here for our Debt Elimination Plan.
If you are close to retirement age, consider switching up how you invest. If you’ve been investing aggressively in stocks up to this point, maybe start looking into a more conservative approach with more bonds.
BUILD UP EMERGENCY FUND
It has been recommended in the past that you have at least three to six months worth of living expenses saved up in your emergency account. This will help prevent you from relying on credit cards in the chance you find yourself needing cash for an emergency. If this isn't possible, try to save as much as you can each paycheck and place it into an account that you can't access easily. For example, a checking account at another financial institution for which you don't have a debit card.
Since no one knows what the future holds, it’s always a good idea to keep your resume updated and ready to go. Continue to invest in yourself through education and other work skills that will make you a valued employee if cuts must be made.