9 Steps to Prepare Yourself Now for the Next Recession

9 Steps to Prepare Yourself Now for the Next Recession
23 Aug 2017
  • Not even a crystal ball can predict what will happen in the future. While the economy has ticked upward since the Great Recession ended in 2009, expansion probably won’t go on forever.
  • Are you ready today to withstand the fallout from a crashing economy tomorrow? Or in the next downturn will you wander into a McDonald’s and have to think twice about ordering fries with your burger?
  • Here are 9 ideas to help you prepare for a possible recession:

 

  1. Beef Up Your Bank Account
    • While you’re feeling a little flush is a great time to start socking away some cash.
    • Check your savings balances. Could you live off your savings for six months, if not a year?
  2. Lower Your Dependency Rate
    • How much of your regular income goes out as fast as it comes in?
    • Your dependency rate is the rate you depend on your income, for example:
      • If you spend 95% of your income on a regular basis, your dependency rate is 95%.
    • Your goal is to decrease your dependency rate over time, even in the face of pay increases.
    • Doing this will not only help your family in the face of a recession, but will also make retirement easier.
  3. Update Your Resume
    • No job is recession-proof. Always be ready to seek a new job.
    • Keep your resume up to date even if you’re not job-hunting now. You never know when you’ll need to send one out quickly. If you keep it current, you’ll be able to customize it quickly for whatever position you seek.
  4. Network Now
    • Don’t wait until you’re desperate to network. Businesspeople might sense that you only come around when you want something.
    • Look for groups or events that align with your goals. Check alumni gatherings, industry meetings or even your house of worship.
  5. Consider a Side Job
    • The so-called gig economy makes it easier than ever to make money on the side.
    • Whether it’s setting yourself up as an Uber driver, starting a dog sitting service or selling goods online, you can find ways to generate extra income.
    • You can sock away the money you earn, invest it or pay down debt.
  6. Pay Down Debt
    • Keeping your debt low and keeping your credit score high will make you more secure and more able to pounce when opportunity knocks.
    • Paying off debt now can also save you hundreds of dollars in interest payments later — and help improve your credit score.
  7. Track Your Spending
    • It’s easier to reach your financial goals if you know where your money is really going.
    • With free money-tracking programs, you can view all of your accounts in one place — checking, savings, retirement and more. Some also enable you to create budgets.
  8. Check Your Portfolio
    • When was the last time you adjusted your 401(k) or IRA investments?
    • Do you have too much money in stocks, especially if you’re near retirement?
      • Too many people did before the last economic downturn. Consequently, many lost a good chunk of their retirement savings when it hit.
      • There’s no excuse for that, considering that rebalancing your investments portfolio can be done in less than 15 minutes.
  1. Don’t Wait
    • By the time anyone declares we’re in a recession, we’ll be in one already. That’s one reason it’s good to prepare now.
    • Before a recession becomes official, there are warning signs. More important than watching for signs, though, is simply getting started preparing for the next downturn.

 

Original Article: https://www.moneytalksnews.com/10-ways-prepare-yourself-for-the-next-recession/

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