How to Prepare for a Recession
No one can say for sure if there will be a recession, but it never hurts to prepare for the worst (and hope for the best! Madison Monroe & Associates is here to support you through thick and thin. Many of you may be worried and money may be tighter than usual. It’s important to stay calm and make rational, informed decisions. We’ve got a few ways you can prepare yourself for a recession that are not difficult or time-consuming and should give you at least a little peace of mind.
The most important thing we can recommend is to NOT PANIC. Consumer confidence is hugely important to the health of the economy. Inflation may be the highest we’ve seen it and with it, the interest rates have risen. This is an effort by the federal government to cool inflation, but it’s easy to get worried. If you’re buying less and spending more, fear begins to set in. Do not make decisions based on this fear! The outcome is never good, so take a deep breath.
Get current on your bills if you aren’t already. It’s easy to fall behind when money is tight, but you can always call your service providers and ask for a payment plan. This is much more foolproof than putting it off and having to later pay a bunch of late fees.
Bulk up your emergency fund. If the worse happens and you find yourself out of a job, you’ll be glad you were able to put even a little bit away while you still had income. Aim to save enough for 2-3 months of living expenses so that you’ll have the flexibility to focus on getting yourself another source of employment.
Work on paying off your high-interest debt. Madison Monroe & Associates is here to advise and assist! Give us a call and we’re happy to talk you through options that work for you.
Do not pull money out of investments or stop investing. Keep investing in your company 401K and your IRA.
LIVE YOUR LIFE. Sitting and worrying about the worst possible scenario will not prevent it from happening. Find joy in every day and quell fears of the future by living in the present.