Is there going to be a recession? What you can do to prepare your finances.

Is there going to be a recession? I’ve lost track of how many times I’ve been asked this question in recent weeks. No one can give you that answer. If I could predict the future I wouldn’t be writing a blog post, I’d be counting my money on a private island. 

Consumer confidence matters

However, if people are afraid, personal belief in the economy impacts the economy. We’ve been hit with record-high global inflation that my generation has never seen, a pandemic, global unrest and the fed has raised interest rates. (They are expected to raise the rates multiple times this year in an effort to cool inflation.) 

I understand why people are worried.

When you are paying more and more for to feed your family and buying less and less at the grocery store, you start to worry. When you’re in a housing market you have been priced out of, you start to worry. But I want you to take a deep breath. Don’t make any big decisions based on fear. Fear-based decisions do not have a good outcome. 

Here are a few things you can do if you are worried. 

Get current on your bills if you’re not already.

(We’ve all fallen on hard times and you do not need to be ashamed of this.) Call your service providers and tell them your situation and work out a payment plan to get yourself current. I wrote a post that should be helpful.

Bulk up your emergency fund.

The average amount of time someone is without work is 7.7 weeks. (According to the us Bureau of Labor Statistics.) So have AT LEAST 2-3 months of living expenses will help.

Work on paying off your HIGH INTEREST debt.

Don’t panic and pull your investments out of the market.

Keep investing in your company sponsored 401k, keep putting money into your IRA. Don’t stop investing.

Just because it’s a negative headline doesn’t mean you need to have a negative reaction.

Yes, there is “bad news” but you can have neutral feelings. There is literally nothing you can do to stop it or prevent it and ruminating on it doesn’t help you. Live your life. Love your family. Go outside. Read your books. Be kind to strangers. Bake someone some banana bread. Drink your water. Do your eyebrows. Moisturize. Wave to a dog in the car at the red light. Watch trashy TV. Text your friend a funny meme.