The 12 steps you should take to protect your money and prepare for a recession
Are you recession-ready? Shore up your safety net, improve your job prospects, work on your trouble spots, protect your retirement savings, and more: You need to protect your money now.
It shouldn't exactly come as a surprise then that the latest Gallup poll found about half of Americans now believe that a recession in the next year is likely—a more pessimistic reading than the survey found 12 years ago, just two months prior to the start of the Great Recession. Even more affluent households are often cash-strapped. Among those making $85,000 or more—the top 25 percent of the income range—the typical family only has enough in liquid savings to replace 40 days of income.Financial planners typically recommend keeping enough in an emergency fund to pay for at least three to six months of basic living expenses, and preferably more heading into a recession.
McCullough likens it to a fire drill."You can think more coolly when you're not in crisis," she says."You hope it won't happen but if a fire does break out, you've tested the fire escape, you've checked the extinguishers, everyone knows the plan.
Also include tangible, quantifiable accomplishments, whenever possible, advises career coach Caroline Ceniza-Levine of the firm SixFigureStart."In recessionary times, employers are very gun shy," she says."They want evidence a new hire will pay off." "Your emotions are your best clue," says McCullough."What stresses you out the most—credit card debt, the feeling that you're spending beyond your means? Whatever the little nagging voice in your head is telling you is what you should tackle first."If yours is among the 37 percent of American households that carry a balance, now's the time to get aggressive about paying off credit card debt. At the current average financing rate of 17.
Still, the time to schedule any medical tests or procedures you need or have been putting off is now—when you still have generous coverage from an employer and there's a good chance you've met your deductible for the year.
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