Even if things get worse and we go into recession territory, there are ways to protect your finances.
If you are worried about the future of the economy and the possibility of a recession on the horizon, you are not alone.
Why is this important?
“A strong economy requires consumer trust, and in many ways it’s declining,” Mark Malek, chief investment officer at Siebert Financial, said in an email. “Do you agree with the recession? Well, it’s not statistical significance enough to recommend you fill your backyard with canned food, but we need to be aware that things can get worse for us.”
But even if things get worse and we go into recession territory, there are ways to protect your finances.
Please check your budget again
Money can be particularly tough during recessions, especially coupled with periods of high inflation and low income outlook.
“Expectations for future revenue outlook have been negative for the first time in five years, suggesting that economic concerns are spreading to consumers who are concerned about their personal situation,” said Stephanie Gyad, senior economist at Global Indicators for the conference committee, in a news release.
Related Stories
So it may be time to check your budget and identify areas where you can cut and accelerate savings. Maybe you have a subscription service that you don’t use frequently enough or at all. Alternatively, you can find a free alternative. But even moving to cut back on eating out can save you plenty of money.
However, reducing future purchases can also be helpful. Delaying large purchases like holidays and new cars may not be too stressful.
Stay up emergency savings
If you cut costs and increase your savings, it’s a good idea to move to high-yield emergency funds. Most financial advisors recommend that your emergency fund has at least six months’ worth of essential costs.
If necessary, seek unemployment benefits
A recession is often defined by a rapid increase in unemployment. The unemployment rate remained at 4.2%, according to the latest employment report from the Bureau of Labor Statistics (BLS). However, uncertainty remains.
“The share of consumers, particularly those who are hoping for less work in the next six months (32.1%), was just as high as in April 2009, in the midst of the Great Recession,” Guichard said.
Therefore, if you lose your job, you may want to seek unemployment benefits as soon as possible. The process and its length vary widely depending on the condition.
Don’t dig into retirement funds
If the money gets too tight, you might tempt them by cracking eggs from your retired nest. However, there are some consequences.
Pay off high profit obligations
High-profit debt, such as credit card liabilities, can really accumulate during a recession. In fact, credit card balances had risen by $45 billion from the last quarter to $1.21 trillion by the end of December, according to the latest data from the Federal Reserve Bank of New York.
Conclusion
There is a lot of talk in the business community about the looming recession. However, there are steps you can get to survive the recession storm, such as reviewing your budget, promoting savings, and repaying high-profit debt through consolidation.
Epoch Times Copyright©2025. The views and opinions expressed are those of the author. They are for general informational purposes only and should not be interpreted or interpreted as recommendations or solicitations. Epoch Times does not provide investments, taxes, legal, financial planning, real estate planning, or other personal financial advice. Epoch Times is not responsible for the accuracy or timeliness of the information provided.
