The last several years have been unusual for the economy, to say the least, and experts are expecting a recession‡ will occur in 2023. While you can’t control what happens to the economy, you can control how you prepare for any financial headwinds by creating a plan that will help you keep calm during economic downturns. Here are five tips to help you proactively prepare and boost your finances through a recession.

Get savvy about your expenses

Take a look at your budget and determine what are fixed versus variable expenses. A fixed expense will cost the same amount each month. Typical household fixed expenses include your mortgage or rent payment, a car payment, real estate taxes or your health insurance premium. When you look to cut back, especially during a time of uncertainty with the economy and job market, most people look to cut variable expenses first. Those are more lifestyle purchases such as clothing, dining out, leisure travel or getting takeout meals and paying for a round of golf.

However, if you can cut on fixed expenses, which typically accounts for most of your budget, the amount you save could really add up – and you won’t necessarily have to change your lifestyle. That would mean shopping around for lower pricing on car insurance, choosing a less expensive health insurance plan, refinancing your mortgage, choosing a cheaper cell phone plan or deciding to cut the cable for streaming services.

Get creative – keep an eye of your heating costs this winter, cancel unneeded subscriptions, including those that auto renew, look for coupons (many stores now have digital coupons and savings codes as well).

Another tip is to make sure you know your credit card rewards so you’re not missing out on cash back opportunities, store discounts and other small saving opportunities. Use websites or apps to shop around for the best prices on everything, whether it’s food, clothes or gas. Even saving a little bit of money every day can make a large impact long-term.

Shore up your savings

Start with what you have already saved in the bank and try to continue to put more aside. One easy way to save more is to set up an automatic transfer of your funds, so money is directly deposited in your savings account each pay period to help eliminate the temptation of spending the money instead.

If money is tight, try to extend timing on financial purchases, such as buying a new car or a new house. Although those are exciting purchases, they often times are not immediately necessary. It’s best to save up your emergency fund first before you spend money on a big purchase. It’s a good idea to have three to six months of living expenses saved up in an emergency fund.

If you are worried about your money, it’s important to remember most banks are Federal Deposit Insurance Corporation (FDIC) insured, meaning the FDIC insures deposits in banks for at least $250,000.

Setting aside any amount of money you can each paycheck will pay off in the long run.

Assess your liquidity and portfolio

In general, it’s important to avoid putting all of your eggs in one basket. A common standard for portfolios is that they should be well-diversified, meaning your investments are spread across different industries and areas. During an economic downturn, liquidity, or cash, is king. This means you want accounts that still allow for easy access to your money – accounts that can be quickly converted to cash. Money markets are known for providing benefits while still giving you liquidity. You can invest in a money market by buying a treasury bill, buying a money market mutual fund or by opening a money market account.

Be wary of riskier investments in an economic downturn. While bear markets offer a great opportunity for people to buy stocks for a discount, selling stock in a bear market is not necessarily recommended. It may be best to hold tight and ride out the market.

Evaluate your debt

To have more cash on hand, look to see how you can eliminate or reduce your debt. If you have credit card debt, try to scale back on any unneeded spending and set a budget to determine how much you should spend on necessities. Now may also be a good time to consider refinancing or consolidating your mortgage or any loans.

If you are struggling during this time, there are always ways to defer payments to keep debt from piling up. While the repayment options vary from lender to lender, if you openly communicate with your creditor, they should help you find a solution that works best for you, and can boost your finances.

How much cash is enough?

While a recession is hard to prepare for, setting aside money in an emergency fund can make it easier to deal with the unexpected. How much you should be saving largely depends on your lifestyle, monthly costs, income and if you have children or not. A good rule of thumb is to save at least three to six months’ worth of expenses, and then save a little more if you can. Start by keeping track of the money going out of your household, so you understand how much cash you are spending in a given month. This will help you determine how much you would need to save to cover one months’ expenses and still live the lifestyle you are used to.

As you near retirement, you may want to increase your emergency fund to 12 or even 18 months’ worth of savings to ensure you can live comfortably if the stock market dips or there is an unexpected life event such as a family or medical emergency. This way you can dip use your emergency fund well before draining your pension, 401(k) or Social Security benefits.

It’s important to also consider the cost of any upcoming healthcare expenses or medications not covered by insurance as well as any big new purchases like a second mortgage for a vacation home, and account for those payments in your emergency fund as well.

While a recession creates significant worry for many, it’s important to be smart with your money to lessen your stress and help boost your finances. Have a plan and stick to it. A financial planner can help you assess your needs and plan accordingly.

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