Friday, August 23, 2019


Recession fears seem to be heating up.  Between the roller coaster that is the tariff/trade war/China stock market thing to the dire predictions of economists to the media hammering on the topic day after day, there's a good probability that a recession could be on the horizon.  While many people ask "how can I prepare for a recession?", the better question would be how can I ALWAYS be financially prepared for whatever may happen.  To do this...

  • Be debt free.  Including the car, student loans, credit cards, and your house.  If you only have to pay utilities each month, you will be miles ahead, financially, of the average American.
  • Have a very good emergency fund.  The more money you have on hand, or in easily liquifiable assets, the better.
  • Diversify your assets.  Some cash, some stocks, some bonds, some precious metals, some guns, etc.  Never put all of your financial eggs in one basket.
  • Have a very robust stockpile of food and supplies in your home.
  • Be as self-sufficient as possible.  Grow some of your own food, know how to fix your own auto/plumbing/electrical problems, cook your own food, etc.
  • Have multiple sources of income.  Never be completely reliant on only one source of income.
  • Be able to immediately cut back on unnecessary things.  People can and do cut cable (OTA antennas work great in many places), Netflix (free movies from the library are a good way to save money and be entertained), the gym (body-weight exercise are very effective), etc.
  • Know how to reduce, reuse, recycle, or do without.  Basic advice for anyone who needs to cut back on spending.
  • Stay on your toes when it comes to your job.  Never leave a lot of PTO hanging out there (a company downsizing or closure may make all of those days worthless), always diversify your 401k (100% of your 401k invested in your company can spell disaster, just ask the folks from Enron), and use up things like employer reimbursed training or education funds, health insurance benefits, etc. as a sudden layoff can make this things disappear.
  • Go low-profile when it comes to your lifestyle and financial situation.  You don't want to be the person everyone comes to for loans during a recession because everyone knows you have money.
  • If you are planning to sell your home and move to a lower COL area, do so when the housing market is still hot instead of after the housing market has collapsed.

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