It doesn’t look like prices for anything will be coming down in our near future. In fact, it looks like these high prices are here to stay. And if that doesn’t scare the bejesus out of you, financial pundits are predicting that a recession is drawing nearer. What can we do to prepare for a recession? See below:
7 Ways to Recession-Proof Your Life (as per Investopedia, click here)
If you own cash, you will be less dependent on borrowing to cover unexpected costs or the loss of a job. Credit availability tends to dry up quickly when a recession hits. Once these things happen, use your emergency fund to cover necessary expenses, but keep your budget tight on discretionary spending in favor of making that emergency fund last and restoring it ASAP.
If you make it a habit to live within your means each and every day during the good times, you are less likely to go into debt when gas or food prices go up and more likely to adjust your spending in other areas to compensate.
Even if you have a great full-time job, it’s not a bad idea to have a source of extra income on the side, whether it’s some consulting work or selling collectibles on eBay. With job security so nonexistent these days, more jobs mean more job security.
As you near retirement age, you should make sure you have enough money in liquid, low-risk investments to retire on time and give the stock portion of your portfolio time to recover.
If you can’t sleep at night when your investments are down 15% for the year and the year isn’t even over, you may need to change your asset allocation.
If you own a home and have a savings account, you’ve already got a start: you have some money in real estate and some money in cash.
When times are tough, maintain communications with your creditors to keep them happy by making arrangements to keep your accounts in good standing. Many lenders and businesses would rather see you continue to be a customer than have to write off your account as bad debt.
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