Four Ways You Can Prepare Yourself For the Next Recession

Susan Jung |
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Four Ways You Can Prepare Yourself For the Next Recession

By now you have probably seen the headlines and read the news; a recession may be coming. The last recession was December 2007 to June 2009 and was considered the worst financial crisis since the Great Depression. Whether or not we are due for another hit, we’ve come up with some ways you can prepare yourself. 

1. Replenish Your Emergency Fund

At a minimum you should have six months of living expenses in your emergency fund. During the last recession, the unemployment rate was at 5% and in June 2009 it was at 9.5%1.  Having that cash reserve will provide you with ease knowing you don’t have to dip into your retirement savings and help prepare for any unexpected expenses. 

2. Stress Test Your Portfolio

As with many things in life, it’s always important to revisit your initial objectives and review as needed. When it comes to your money, it’s especially crucial. A stress test can help assess your portfolio, troubleshoot any hidden risks and rebalance as necessary*. 

3. Review Your Budget

Look carefully at your budget. Cut out any unnecessary line items and try to put any extra cash towards your emergency fund/savings account. If you have credit card debt look for low-interest credit cards from sites like Nerd Wallet or WalletHub.

4. Stay Calm and Carry On

Whether or not the recession happens, it’s best to stay calm and carry on with your daily life activities. It’s important not to dwell on any what if’s, but actively prepare yourself for the inevitable. 

*If you would like information about DWM’s Stress Test, send us an email at info@destinationwm.com

1https://www.bls.gov/spotlight/2012/recession/pdf/recession_bls_spotlight.pdf
  
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