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Do you find yourself at brunch with friends or simply enjoying a cup of coffee at home feeling joyful, relaxed, and great? Perhaps you are thinking about planning your next vacation because adventure is calling you!
I know many of us are feeling the complete opposite, especially with all the talk about a possible recession. It’s all over the news and social media, and suddenly, you start to wonder: Am I ready if things go south? Yikes! You cannot help but freeze and start panicking.
So, instead of letting the panic creep in, let’s help you feel ready for a recession.
I’m sharing three very simple money tips you can start today on how to prepare for a recession:
You will feel more financially secure, confident, and less stressed about a recession.
1. You Can’t Afford Not to Save
Let’s start with priority number one! If you’ve been putting off building your emergency fund, now is the time to get serious. I am not kidding; cash is king. Prioritizing savings is one of the best ways to recession-proof your finances. You will be able to navigate the recession with less stress.
You can start by aiming to save 3–6 months’ worth of living expenses in a high-yield savings account. This is the money that will keep you afloat if your income changes unexpectedly. This is why cash is king: it will be readily available for you when you need it. You do not have to worry about late bills, panic, or stress.
But I get it. It’s easy to think, “My job is secure,” or “They wouldn’t let me go.” And I hope that’s true! But in times of economic uncertainty, nothing is guaranteed. Trust me, there is no such thing as job security. You need to be ready for anything.
Now, if you’ve already saved 6 months… First of all, YAY 👏! Congrats!!! Now aim for a full 12 months of savings to give yourself true peace of mind. Do take advantage that you you have the ability to save and expand your savings beyond 6 months.
2. Review Your Budget and Cut Out Unnecessary Spending
Yes, I said it. Now, onto the less fun task. It’s time to go through your budget with fresh eyes and ask yourself:
Do I need this? Or do I just want it?
I want you to know that this isn’t about depriving yourself. It’s about getting intentional with where your money is going. Cutting back on non-essential spending today will help you save faster, and protect your peace if a recession does hit. It does not have to be forever, but it does need to happen meanwhile you build your emergency fund to help you whether a recession.
I want to help you avoid panicking if your job is impacted. Instead, you will have a solid emergency fund ready to support you. If you are ready, there is no need to panic. And because you already trimmed the extra spending, you won’t feel like your lifestyle is falling apart. That’s the kind of calm we’re going for.
You will have the necessities! But do know, this takes time so you do need to start now.
3. This Might Be Spicy… But You Need to Hear It
Yes, when the economy is crashing, now is a great time to invest in the stock market. Prices are low, and long-term investors benefit from buying while the market is “on sale.” Everyone, including myself, is super excited about this! Who does not like sales?
BUT, and this is important, if you don’t have at least three months of savings in a High-Yield Savings Account, you need to consider putting off big investment moves. I know you really want to invest while the market is on sale and get ready for your retirement.
But, your priority right now is cash that you can easily access. A 401K, a Roth IRA, are not investment are not emergency funds. Cash is king, remember?
(Here’s how a Roth IRA can help you feel confident about your financial future).
I love investing (and I educate women on how to do it!), but when things hit the fan, you need money in hand, not money tied up in the market. This is why I am urging you to prioritze savings, because in a recession you will need cash.
Now, if you’ve got a side hustle or extra income, great! Keep investing and saving. Remember 3-6 months of savings, and then start saving beyond six months. But if things feel tight, focus on building that emergency fund first, instead of investing at the same time.
What to do during a recession can feel scary, but you don’t have to live in fear. These three recession money tips can help you feel financially empowered and recession-ready—without panic, overwhelm, or guesswork.
Continue working toward recession-proofing your finances! You will definitely not regret being ready if the time comes.
So here is how to prepare for a recession and your next steps:
- Start (or boost) your emergency fund. This is a non-negotiable!
- Get intentional about your spending. Then, send the extra money to savings.
- Only invest if you’ve got a safety net in place.
Financial peace is possible, and it starts with small, consistent actions. You’ve got this!
