In case of a recession, how can I prepare financially?

During times of uncertainty you can always prepare ahead to protect your finances. Here are some ways you can cushion your finances against a recession. 

1. Consider building an emergency fund. A general rule of thumb is to allocate enough funds to cover a 6 month period of rent, utilities, car payments, and other financial commitments. This may vary depending on circumstances, such as if you and your spouse have stable jobs, which then a 3 month period of funding might suffice. However, you may want to save more if you have a fluctuating income. Having something to work with is better than nothing, but if you can save enough to support job-loss then that will help you in the long run.
   
   
2. When times get tough, think of cutting expenses. Although they may hold value to you, gym memberships, streaming services, or monthly subscriptions are things you can probably live without and can help you save towards your emergency fund. Try separating your expenses into two categories: what you have to pay versus  what you can cancel and make your decisions from there.
   
   
3. Do away with high interest debt. When a recession hits, companies that are in debt may deal with rates too high for them to handle, oftentimes leading to bankruptcy. This same concept impacts individuals considering loss of income or potential job loss. Getting rid of high interest debt such as credit card debt is a good step towards recession-proofing your finances.
   
   

Keep your investment eye on the prize. Although the market may be unstable at the moment, the point of investing is to generally see long term gain. Financial planners recommend that you commit to your long term investment goals as it can be an essential step towards recession-proofing your finances.

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