20 ways to prepare financially for a recession

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Ask a dozen economists if we’re heading for a recession, and you’ll get a dozen different answers. What they’ll likely have in common, though, is a gloomy outlook on the immediate future. Between inflation, low economic growth, continuing supply chain problems from the pandemic and the war in Ukraine, the Federal Reserve’s interest rate hikes, and continued COVID disruptions in China’s economy, the economic picture just isn’t very rosy.

A recession always has a massive impact on the real estate market. Seeing property values slide, sellers start to panic, and instead of doing a traditional agent-assisted sale, maybe they resort to a quickie cash buyer company, or even try to sell their home themselves. As interest rates go up, mortgages become more expensive, and harder to qualify for, which makes it harder on buyers — and as demand wanes, home values sag. It’s a troubling spiral that’s tough on everyone.

So if a recession is coming, how can we prepare? Most of the tips from financial experts are pretty straightforward: put money away, get your budget in order, and hold on. Let’s go over the 20 ways to financially prepare for a recession!

1. Go over your income and expenditures

First, look at how much money you have coming in. Then look at your recurring expenses like mortgage or rent, phone and utility bills, medical costs, groceries, etc. For a start, you want to be spending less money than you have coming in. If not, as you find that you’re relying on credit cards or loans to make up the gap each month, eliminate as many expenses as you can, starting with discretionary spending like restaurants, clothing, and entertainment. (Financial experts say you should spend no more than 30% of your income on discretionary goods and services.)

If you sell your house, look into working with a discount real estate agent — this can save you thousands of dollars.

If there are areas where you spend much more than others, investigate why, and come up with a strategy to reduce spending in that problem area.

2. Make a “recession budget”

Once you have a good idea of how much money you’ve got coming in, and what your necessary expenses are (rent/mortgage, groceries), you should come up with a barebones budget that you can revert to if you or your partner lose your jobs, or if you experience some other kind of financial adversity. This will give you an idea of your financial “baseline.”

3. Assess your liquidity

If you have a lot of your net worth tied up in investments, you’ll want to check in and make sure you have enough cash on hand to handle any immediate needs. Double-check the balances of your accounts, and think about where you might be able to acquire cash quickly in an emergency— including last resort sources like your retirement accounts or a home equity line of credit (HELOC). Just keep in mind that if you think you might need a HELOC in the future, you should apply for approval now, while you still have income; if you don’t have any income when you apply, you won’t be approved.

4. Set aside an emergency fund

Experts suggest having three to six months of living expenses in an emergency fund. If you have less than that put away — and many Americans don’t have that — try to allocate as much money as you can into your emergency savings, until you’ve reached that six months of expenses threshold.

5. Draw up a “debt priority” list

If you do experience a reduction in income, you may have trouble making all your debt payments.

Make a list of all your debt payments, and then separate them into tiers, from most urgent to least urgent. At the top, you’ll want to put your rent or mortgage, since they keep a roof over your head. Next, is your car payment, especially if you depend on your car to get to work or school.

If you have student debt, you can contact your lender and ask for a hardship application, which can get you a few months of relief from payments. If you have credit cards, you’ll want to scale back to minimum payments; if you can’t make those, you can contact your lenders and let them know; while this will likely freeze your credit accounts, you can probably work out a payment plan with them.

6. Always reach out to your creditors

Most lenders will work with you on a payment plan, especially if you’ve recently lost your job. Setting up an arrangement with your creditors is much better for your state of mind and your credit rating than simply ceasing all payments.

From this point on, you should have a “negotiation” mindset. Try to settle your debts for less than the full balance, haggle for a slightly better rate, or ask for longer payment terms. It’s surprising how many concessions you can get just by asking — you can even negotiate big fundamental costs.

7. Cultivate multiple income streams

You can’t necessarily count on your full-time job if a severe recession hits, so additional sources of income can be a great source of psychological and financial comfort.

This can mean doing consulting work on the side, buying an investment rental to generate cash flow, starting a small business out of your home, selling things online or through social media, or even something like an innovative income-generating app. Just get money coming in from as many sources as possible, so if you lose one source, you have backups.

8. Stay oriented toward the long term

If the market experiences a downturn, the value of your investments will drop; in a full-on recession, the stock market may drop by up to 40%. But from a certain perspective, this doesn’t matter all that much. Rental investments you own will still generate cash flow even if property values drop. Stocks will dip and then start climbing again, and if your retirement accounts drop, they’ll very likely recover before you need them in their entirety. Remember, you don’t need your entire retirement fund the day you retire — just a small portion of it.

9. Don’t panic

As we said, a recession will likely bring down the value of your property, as well as any stocks you own. Prepare yourself for this inevitability, and get ready to weather the storm. After all, if you sell after the downturn but before the recovery, all you’re doing is turning your paper losses into actual, irreversible losses. Your investments will recover their value — just be patient, and don’t give in to the impulse to panic sell.

10. Be honest about your appetite for risk

Look at your investment portfolio and ask yourself if you can sleep easy if your stocks lose 15-20% (or more) of their value in a recession. If you can’t tolerate this kind of drop, move out of your positions now, before the market declines, and put your money into something safer, like blue-chip stocks, or bonds, or simply convert them to cash reserves so you can take advantage of post-correction bargain prices.

11. Diversify, diversify, diversify

Similar to our advice about cultivating multiple income streams so you won’t be devastated if one of them evaporates, you’ll also want to diversify your investments to spread the risk around. If you have most of your money in one investment, move a good portion of it to other investments; for example, many experts suggest putting money in non-correlated investments like stocks and bonds, which means that when one is up, the other tends to be down, and vice versa.

12. Maintain a good credit score

In a recession, credit markets tighten up. Lenders give out fewer loans and their standards are higher. If you anticipate needing credit during the downturn — if, for example, you think you might want to pick up another investment rental while property values are depressed, you’ll need a pristine credit score to qualify for a mortgage.

How do you keep your credit score high? Some simple ways are paying your bills on time, maintaining a low debit-to-available credit ratio, and keeping your oldest credit cards.

13. Pay down your high-interest credit cards

Speaking of credit cards, high-interest debt is very costly to carry, so you’ll want to pay it down as much as possible to prepare for lean times. If you find yourself unable to make payments on your credit card debt, the interest rate and fees will very quickly cost you hundreds or thousands of dollars a month.

If you aren’t able to pay down your credit card debt completely, consider transferring your balance to a balance transfer card with a low (or zero) introductory APR.

14. Recession-proof your career

One of the best ways to ensure yourself a stable income is to recession-proof your career by pursuing higher education. Statistics are clear that the unemployment rate is lower among bachelor’s degree and advanced degree holders, so earning degrees and certifications in your field of expertise can make you indispensable when the recession hits.

Another approach to this is to learn skills that make you broadly employable, so if you do lose your primary job, you’re able to search in adjacent fields.

15. Maintain the proper perspective

A recession isn’t an apocalypse; it’s more like bad weather. The definition of a recession is a drop in output for two consecutive quarters, and that’s happened 33 times in U.S. history. Each time, the economy has not only recovered but boomed afterward. A recession can be tough to weather, but it will pass.

16. Come up with a strategy for your student loans

If you’re one of the nearly 13% of Americans with student debt, you should think about how you’re going to continue to service that debt during a recession. Federal student loan payments are suspended without interest until September 1, so in the short term, not paying could be a viable option. But if you have a steady income right now, paying down your student loans now, during a period of zero interest, could get you way ahead of the game.

However, if you experience a financial shock during the coming recession, and the pause on repayments has been lifted, you do have some options. You can opt to get onto an income-driven repayment plan, which limits your payments to a certain percentage of your income. You might also qualify for deferment if you’re unemployed for an extended period, though interest will accrue during that time. And finally, you can request a pause on your student loan payments, to give you a little breathing room while you regroup.

If you have private loans, contact your lender. The majority of private lenders do offer some kind of payment deferral or forbearance if you’re under severe financial stress.

17. Consider taking advantage of the buyer’s market

When property values and stock prices drop, a lot of investors are too spooked to buy in. That’s only natural. But a recession is often the best time to invest, with prices at decade-long lows. And with lenders tightening up their lending standards and offering fewer loans, you’ll have much less competition than usual. If you have stellar credit or a lot of cash on hand, you can buy that big, life-changing real estate investment you’ve had your eye on at a steep discount.

Just don’t get too opportunistic, or you may end up buying a property that leaves you with major, lasting regret.

18. If you’re selling your home during the recession, prepare for slackening demand

When a recession sets in, lenders will give out fewer mortgages, which means there will be fewer qualified buyers out there. For you, the home seller, that means buyers will have some leverage, and you may have to make some concessions if you want to get your sale across the finish line.

An effective way to time your sale is to monitor the amount of inventory in your market. Regardless of home prices, if you sell when inventory is very low, you should be able to execute a quick, lucrative sale. Likewise, if inventory is very high, you should try to hold off until a moment that’s more advantageous to you.

19. If you’re buying a home during the recession, you should have a relatively smooth ride

After years of a red hot seller’s market, a recession will shift the balance of power more towards buyers. And if you’re one of the lucky few who can get approved for a mortgage (or have enough cash on hand to buy outright), you’ll not only be able to choose from a wide inventory of homes, but you’ll also be able to aggressively negotiate on price and various seller concessions. Since there will be fewer buyers on the market, you’ll have more bargaining power — so make sure you use it!

20. If you’re renting during the recession, prepare for increasing rents

In a recession, lenders give out fewer mortgages, and many people who lose their jobs may have to fall back on savings — which may have been earmarked for a down payment on a house. All those would-be buyers are now going to rent until things recover, which means rents are going to start climbing. Start preparing now to pay higher rents, and if you get hit with the double whammy of skyrocketing rents and job loss, consider taking in a roommate or two to lighten your financial burden.

More recession tips

Worried about a recession? You may want to rethink your investment portfolio during rocky financial times. Check out this recession survival guide for more tips on how to stay financially stable during a recession.


This article originally appeared on Clever and was syndicated by MediaFeed.org.

23 jobs that are pretty much recession proof


Do you want to keep your job during a recession? Let’s talk about the recession-proof jobs that you can choose in any field. While no job is 100% recession-proof, certain career fields are impacted less during a recession.

During an economic slowdown or downturn, there are generally layoffs and fewer job offers. It is harder to get a job since many sectors get hit. Everyone will experience a recession differently, but it will impact most people. Whether you have high-income skills can become irrelevant quickly.

At any time a recession occurs, many are worried about their jobs. During the 2008 recession, the unemployment rate was over 10%. In the recent pandemic, the employment rates quickly rose to 14.7%. It has since come down to 8.4%, which is still significantly higher than the 3.5% before the pandemic.

Are you looking for career fields that are impacted less during a recession? While there is absolutely no guarantee, specific industries or professions are essential for our society. Here is a selection of recession-proof jobs at every skill level.

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It doesn’t matter whether you’re a registered nurse, doctor, assistant, or anything in between. Having a job in the medical and healthcare field is a great place to be during a recession.

Even when a recession hits, people will get sick, and health care is needed. Hospitals or clinics are a great career choice if you want to have job security. Plus, if you’re someone who has a nonmedical job in a healthcare clinic or hospital, you may benefit from this as well. As long as health care is needed, you will be as well.


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Technology is advancing daily, and we’re trying to benefit from that. Companies are improving systems to replace manual labor and save on expenses.

If you’re looking for a recession-proof job, working in the IT field is something to consider. People need help with their computers, phones and software more than ever before. Our world relies on technology and needs IT professionals to function.


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Whether there’s an economic crisis or not, accountants and auditors have a relatively recession-proof job. As long as businesses will continue, they need an accountant to report their yearly numbers and check their books. With their qualifications and specific skill-set, job opportunities are all around.

Also, people who have an accountant file their tax returns will most likely still use that. It’s better to pay an accountant than to make a mistake that costs more than their rate.




An unfortunate side effect of a recession is that many are going into debt. People will add more money to their credit card balances, rack up more debt and need help managing it.

As a debt management professional, you help people reduce their debt and prevent bankruptcy from happening. You help people that need money now to reduce their debt.


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When we are talking about core services that we will always need, utility workers are providing them. We still need support in waste management, water, electricity and other utilities. Everyone is using these services daily, meaning there is constant and high demand.

The high demand combined with the aging current labor force means that there will be a labor shortage for years to come. If you’re looking for a recession-proof job, utility workers are high on the list.


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Just as utility working, public safety professionals are crucial to society during any time in the economic cycle.

Working as an ambulance driver, firefighter or police officer makes you relatively recession-proof. It is also a great option when you are looking for a job where you can help others.




If you work for the government, you have one of the most stable jobs there is. Government jobs will be influenced little by the economic cycles, as there is a constant need for them. Also, the government is a big organization that will not downsize the moment a recession hits.

When you are applying for jobs, check out the postings they have online. It is a stable career path for your work life. Don’t worry if you are an entry-level worker without a lot of work experience. You can choose from several jobs at all levels.




People need education, no matter the state of the economy. Teachers are essential, even during times when learning takes different forms. It doesn’t matter whether you are providing online classes, the need for education is still there.

Stanford economist Caroline Hoxby found that colleges and graduate schools saw higher enrollment numbers during the Great Recession. People want to postpone their entry into the job market since there are fewer openings. They enroll in higher education instead.




Online shopping and delivery services have increased over the years. In the last couple of months, delivery services are booming. People want to avoid going to shops, and ordering your things online is easier than ever.

You can deliver groceries, clothes, household items, furniture and more. Everything that you have in your home, you can transport. The continued increase in people having things delivered makes delivery and courier services, one of the most recession-proof jobs out there.

Extra tip: Deliver groceries through Instacart. With Instacart, you can determine your own schedule, and you get paid to deliver food to peoples’ doorstep.


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Whatever the state of the economy, people still need to get their car fixed. While people will skip the smaller optional repairs, most auto repairs are mandatory to keep driving safely.

Many people wait to buy a new car and will get their current one repaired instead. Because older cars need plenty of maintenance, auto mechanics will not be bored.


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If you are working in law enforcement, you have a job that won’t stop just because of a downturn. People still want to live in a safe environment, and laws need continuous enforcement. Whether you are a federal agent or a detective, your job will be relatively stable during recessions.



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Corrections professionals like corrections officers and parole boards are great recession-proof jobs. They often don’t see layoffs at all during a recession.

Just as in law enforcement, prisons operate as usual, and everyone involved will need to continue their work.

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1. Finding a qualified financial advisor doesn’t have to be hard. SmartAsset’s free tool matches you with up to 3 fiduciary financial advisors in your area in 5 minutes.

2. Each advisor has been vetted by SmartAsset and is held to a fiduciary standard to act in your best interests. If you’re ready to be matched with local advisors that can help you achieve your financial goals, get started now.




When the economy experiences a downturn, everyone that is involved in the justice system stays employed. Whether you are a judge or work in a related service like the court’s security, you will keep working.

Currently, with the pandemic, some courts are closed or postponing services. It is not something related to an economic downturn, but rather to the current global health crisis.




Whether the economy is crashing or flourishing, funerals and cremations will continue. Certain families may go for the less expensive option, but there will still be enough work during a recession.

While this may not be your dream job, think about it in your search for jobs. If you’re looking for a new job or are unemployed, this field may be an opportunity for you.




In big cities, public transport workers are always in high demand. People taking public transport to work may even increase during a recession, as some may have to get rid of their car.

Whether you drive the bus or sell train tickets, public transport workers will have relatively high job security when a recession hits.




The moment a recession hits, people are slowly going to decrease their discretionary spending. They don’t buy things they don’t need, search for no spend ideas and look into at-home date night ideas. They’re staying in more and going out less.

When you cut down on how often you go out to eat, you will do more grocery shopping. While there are some quick tips to save money on groceries, you will still need to get groceries. If you’re looking for a job, a grocery store worker may be more stable than other jobs.


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Just like other healthcare services, pharmacists will see a steady stream of customers. People will still need their sleep medication or antibiotics. With the population aging, this can be one of the best recession-proof jobs for years to come.





The general population ages, creating more jobs for senior care professionals. People need assistance living in nursing homes and at home, even during a recession. People need quality elder care, unrelated to the current economic situation.



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On the one hand, some people may stop their therapy sessions if their financial status is declining. On the other hand, when a recession occurs, many people are stressed out. It can cause more mental health problems and more marital problems. Some people will develop an anxiety disorder, while others will turn to alcohol.

Mental health professionals are crucial at the time a recession or economic downturn hits.




As with health care for humans, pets also need health care during recessions. While people do bring their pets to the vet, they do so less regularly. With people having more pets and spending 7% more on pet care every single year, we can conclude it’s a rather recession-proof job.


istockphoto/Kateryna Kukota


Actuaries help with the risk analysis of businesses. In normal economic circumstances, their jobs are necessary for companies to assess risks and hedge for them. In an economic downturn, analyzing risks is even more essential.

Actuaries help companies analyze the areas with high risk, the best places to cut costs, and increase efficiencies. In times of crisis, these are all valuable things to know. Generally speaking, actuaries will keep their jobs during an economic recession.




Digital or not, marketers have a great shot at keeping their jobs during a recession. Most marketers will increase the investment made by companies. For every dollar companies spend on their marketing budget, they want to see more than that dollar returned.

For example, at my company, we have marketers who will return $1.50 for every $1 invested in the marketing budget. No matter how much money you put into it, you will get more out.




During recessions, couples won’t stop getting divorced. As financial distress is one of the main reasons for divorce, recessions may increase divorce rates. On the other hand, financial hardship may keep couples together.

If you are a divorce attorney or mediator, you will still have enough work during downturns.




Why are some jobs recession-proof while others aren’t? Plus, how is your specific job doing when it’s not on the list? Don’t worry. The fact that your job isn’t on the list doesn’t mean that you’ll get fired next week.

There are a couple of things to consider when you want to know if your jobs can survive a recession. Ask yourself:

  • Is your job essential for society? For example, without healthcare or public transport workers, there would be chaos quickly.
  • Are you filling a need? For example, people want to get their pets healthy again.
  • Do you need specialized training or experience? For example, IT professionals or accountants have specific education and experience that is hard to obtain quickly.

If you don’t answer yes to all three questions, don’t worry. There are so many jobs that are crucial to our society and general well-being. We simply weren’t able to list them all.


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While no job is 100% recession-proof, some jobs are more recession-proof than others. That said, recessions are hard and affect our society in many ways.

If you’re worried about layoffs or you already lost your job, go through the list of these best recession-proof jobs again.

See what jobs suit you and start to include those jobs into your job-search. Searching for a new job and job-hunting, in general, can be challenging.

Find career opportunities for a job you enjoy by checking online job boards, (online) job fairs, vacancies, and make sure you connect with recruiters.

Finding a job or finding employment depends on the career path you want to take. Check out the available jobs that are currently trending and looking for staffing. You may find your dream job that is entirely recession-proof!

This article was originally published on RadicalFire.com and syndicated by MediaFeed.org.



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