The signs are all pointing to an imminent recession. Much like 2008, layoffs are happening, stocks have more than tumbled, and the nation is looking to the government for a bailout.
Although I wasn’t drastically impacted by the recession over a decade ago, I did learn some valuable lessons on how to prepare in case another hit.
Here’s my take on how you should prepare for a recession, whether now or later.
Evaluate your financial situation. What do you have in savings? Do you have an emergency fund? You’ll need to know where you currently stand so that you can create a plan to sustain you through a downturn.
Save for emergencies. If you haven’t already, you’ll need to start saving for emergencies. This may mean completely starting a new savings account, or just adding more to what you already have. Have cash available in case of a job loss or reduction in income.
Pay off debt. 2008 showed how crippling debt can be during a recession. While you’re still able, pay off your debt fast! Don’t be stuck with a financial obligation that you may not have the financial means to pay later.
Reduce spending. In order to free up cash to save for emergencies and to pay off debt, you’ll want to reduce unnecessary spending. You should be able to identify where you can cut spending when you evaluate your financial situation.
Increase your streams of income. Now is a great time to also diversify your income. There are so many ways that you can make money online to help increase your income. Take advantage of websites like this one to learn how.
Don’t panic. Though it’s hard to fathom not panicking at this time, you just have to remain calm. Panic causes us to make irrational decisions and that’s the last thing you need to do before or during a recession.
These are all things that I’ve learned over time that I hope are helpful.
