5 Steps You Can Take to Prepare for the Next Recession
As the United States continues to move out of the Great Recession of the past decade, economic excitement is high. Jobs are up, unemployment is done, and optimism is through the roof. Tax cuts and promises of more tax cuts by the Trump administration has most Americans feeling pretty great about the future.
Despite this, recessions are a normal part of the economic cycle. Regardless of whether you’re prepared for it or not, the next recession WILL happen and it will come faster than you could ever imagine.
The majority of Americans who struggled during the last recession didn’t learn their lesson and kept pursuing the same behaviors that got them into so much trouble in the first place. They continued to add to their debt, refused to save money, and forced the government to spend trillions of dollars to keep the banks and other industries afloat.
There are a number of economic experts who believe the next recession is just over the horizon and say there’s a small chance it happens between the tail end of 2018 through 2020. In reality, the markets could tank in a matter of seconds and send this upward momentum into a tailspin.
If you want to be prepared so your family isn’t one of the millions who will suffer and struggle to get by during that time, there are steps you can take to make yourself recession-proof. Let’s look at several of them.
1) Create an Emergency Fund
It’s been previously reported that a majority of Americans don’t even have $400 saved in the event of an emergency. That’s bad news! If you lost your job tomorrow, how would you get by? Right now, you might not be without a job for long, as there are plenty of openings out there. But during a recession, work is often sparse.
$400 wouldn’t cut it. $1,000 is crumbs. What you need is at least six months saved in your account to help you for an extended period of time as needed. That’s good advice even during the good times, because companies still decide to close or move overseas no matter the economy. Be prepared for any emergency, big or small.
2) Reduce your Debt
If you have a bunch of debt, as most Americans do, it’s really to your detriment and makes life incredibly hard during a recession. In fact, high debt was one of the causes of the last recession, so when people stopped paying back what they owed, banks needed to be bailed out to survive.
You can consolidate and reduce your debt by calling Financial Helpers today. We can hook you up with various government programs designed to help Americans pay back student loans, reduce their debt payments, and so much more. Call us today to learn more at:
3) Balance Your Portfolio
A lot of investors pick a spot or two and throw all their investment into that, but it’s not a smart move. The market might be soaring today, but tomorrow could tank your whole investment. If you spread yourself out, you’re less likely to lose it all. There are a variety of recession-proof stocks and commodities that do fairly well even with everything else is dropping.
4) Improve Your Standing at Work
Most companies don’t shut down completely during a recession. Because so many customers are struggling, they lose money and end up cutting workers to save money. The more valuable a person is to their employer, the less likely they’ll be cut when bad news hits. The company will operate with reduced numbers until the turnaround happens.
5) Cut Costs
Paying off your debt will significantly make things a lot cheaper. If you have a car you’re no longer making payments on, and the house is yours, and the student debt is gone, you’re not making payments on those things. Cutting costs during the recession will be necessary, but cutting costs today to save money and pay debts TODAY is essential to survive.
In order to get through tomorrow’s recession, you must prepare today. Don’t wait until the last minute to decide you’ve been living above your means.