How to Become Recession-Proof Even if You Are Afraid of a Recession?
“It’s a recession when your neighbor loses his job; it’s a depression when you lose your own.” ― Harry S. Truman.
I am not sure when Harry S. Truman uttered that quote, but it is impactful; every time there are massive layoffs, this quote resonates more and more. While economic downturns are part of a capitalistic society’s economic cycle and are totally out of our control, what is in our control is the small actions we can take to weather the financial storm when it eventually turns our way.
The fear of an economic recession can be overwhelming, but taking proactive steps to protect your finances is essential.
Becoming recession-proof can give you peace of mind and prepare you for any economic challenges. Whether you’re just starting your financial journey or looking to improve your current strategy, these tips can help you build a solid foundation for a secure financial future.
Here are some steps you can take to become more recession-proof:
1. Build an emergency fund.
A substantial savings cushion can help weather financial hardships during a recession. For example, during the height of covid, I was laid off, and there was no window to return to work as the world has literally changed.
I was fortunate enough to have saved some money over the years, not much, just five percent of my checks, but that amount carried me through that tough time. I was able to go four months without working.
According to financial experts like Dave Ramsey, the goal is to save enough to cover at least 6–12 months of living expenses. I wasn’t near that, but at least I had four months, and I was grateful I did. Now saving a portion of anything I make for an emergency is a lifelong strategy because something always comes up.
How to start an emergency savings account?
- Break Down Your Savings Goal into Smaller Steps.
- Open a Separate Emergency Savings Account.
- Automate Deposits into Your Savings Account.
- Funnel Extra Money Into Your Savings Account.
- Look For Ways to Boost Income and Cut…