Discussions about an upcoming recession are extremely frightening. Focusing on what you can control is a good way to be prepared and maintain your sanity.
The most important thing is to focus on what you can influence in your own life. While things may seem scary and the unknown is looming, it’s going to be all right! Look hard at your job security, debt, and investments.
Secure Your Job
The first step is to look at the money you earn, which means you should consider the safety of your work. Make yourself indispensable in your job in order to create job security. To complement your role, learn new skills and begin to acquire more responsibilities. Pursuing an education is one of the best investments you can make.
You should also get your resume together and start networking in order to be prepared for a Plan B. If a recession hits, you don’t want to start a job search with a bunch of other people already laid off. By networking ahead of time, you’ll have a head start.
Pay Down Debt
If you have high-interest debt, now is the best time to begin aggressively attacking it. Prioritize debt starting from credit cards and switch to other types of loans, such as mortgages or auto loans. Student loans have more favorable terms, making it less important to pay them off.
One technique that is often advised by experts in the form of a debt avalanche. The plan is to continue to pay the minimum on each balance, on time, but put any extra money on balance with the highest APR.
To order to create some breathing room in your budget, it is important that you pay down any outstanding debt, more precisely high-cost debt, such as your credit card balance.
If a recession truly scares you, take your budget out and start cutting expenses now. The money you save can go straight into your emergency fund, which can be kept in a high-yield savings account with zero market risk and even growth opportunities.
Regardless of the condition of the economy, maintaining an emergency fund is key. After all, an enormous medical bill or temporary income loss may occur at any time. The first line of defense against debt is to support yourself with a cash safety net.
Recessions can be worrisome, but if you follow these tips and help prepare yourself for a recession, you may come out of it smoothly! Follow our blog for more recession tips. If you have any questions, call RMLEFCU at 303-458-6660.