A recession is defined as two or more quarters with negative economic growth. They’re a natural and regular part of the economic cycle. (What goes up must come down.) What can you do today to help make sure you’re ready for the next recession?
The last recession was a whopper! It was really a gut punch to the American economy. We saw job losses and then the whole housing market crashed for a variety of compounding reasons. Since then we’ve enjoyed slow but steady economic growth. It took us a long time to dig out. We’ve had a nice long run so we’re probably due for another downturn soon. How can we be ready for the next recession?
This CNN Business article lists four ways to be recession ready: 1) Build an Emergency Fund, 2) Diversify your investments, 3) Get a side job, and 4) Lower your fixed living costs. Check out the article for insights to all of these ideas.
Another one I thought about was to pay down your debt. Rather than spend, spend, spend during the good times, it’s a good idea to get your personal debt down, down, down. If you have a car loan or credit card debt, this is the time to tackle that. It would be so comforting to go into a recession period with no recurring debt payments. Of course, you’ll want to be sure you address you debt in a way that’s best for you. How nice would it be not to have an automobile loan?!