It’s normal to be worried about the future. It’s smart to plan for it. If you’re wondering whether the economy is about to dip into another recession, you’re not alone. As the Washington Post reported: “Data from Google shows that searches for “recession” are at their highest level since November 2009, just a few months after the end of the Great Recession.”
The question isn’t if we are going to have another recession — economies tend to rise and fall in somewhat predictable cycles, after all — but when. To quote NPR political reporter Danielle Kurtzleben, on the Planet Money Indicator podcast:
“But, listen, I’m not saying recession is coming tomorrow. I’m not saying it’s coming in the next month. But I’m saying there’s reason to think that recession is at least somewhat likely to be on the horizon, as in, in the next couple of years.”
What should you do, with a potential recession on the horizon? You can consider taking a few actions right now to help secure your financial future and mitigate the effects of the next recession before it happens — because making plans now can save both your money and your stress levels.
Plus, you just may benefit from these plans even if the next recession doesn’t hit for years.
Create a budget and cut expenses
If you don’t already have a household budget, it may be a good time to consider creating one. Popular budgeting apps, such as YNAB, Mint and Personal Capital, make it easy to set up a budget — and once your budgeting categories are in place, you can start tracking how much you spend on gas, groceries or entertainment.
If this is your first time creating a budget, it’s a good idea to spend the first few months tracking where your income goes and learning your real-life spending patterns. Some of us think we spend less than we really do, and discovering where our money actually goes can be eye-opening!
Once you understand your spending habits, it’s time to start thinking about which ones you’d like to change. Many new budgeters learn that they spend heavily at restaurants, fast-food joints or coffee shops, and decide to start packing sack lunches or commit to eating six out of seven dinners at home. Other budgeters realize that they’re subscribed to multiple video streaming subscriptions and decide to cut back.
Changing some of your spending habits can not only help you save money but might also help you prepare for living on a reduced income in the future. If you lose your job during a recession, for example, the money you save now can help cover your expenses as you look for work.
We’ve got a list of twelve easy ways to save money in 2019, so start there — and see how quickly your savings can grow.
Take advantage of employer benefits while you have them
Remember, a recession doesn’t necessarily mean that you’ll lose your job. Not all employers lay off employees during recessions, and many employers work hard to keep their best team members. However, they often look for other ways to cut costs. This might mean losing the coffee and donuts in the breakroom, or it might mean losing your 401(k) contribution match — so it’s in your best interests to claim as many employer benefits as you can while you’ve still got them.
Here’s a short list of common employer benefits that might save you money in the long run:
In life, it’s pretty rare to have someone offer to put their money into your account. Think twice before declining the offer. If your employer offers to match a percentage of your 401(k) contributions, consider contributing at least enough to get the maximum employer match. This is an opportunity to let your employer help you save for retirement.
Thanks to the Affordable Care Act, most of us don’t have to worry about not being able to get health insurance during a period of unemployment. However, ACA health insurance plans don’t include vision or dental insurance — and while these plans can be purchased separately, many people elect to go without vision or dental insurance or to pay for individual appointments out-of-pocket.
If you have an employer that provides health/vision/dental insurance, consider taking full advantage of those benefits now. Schedule your annual physical, let your optometrist do the special glaucoma test and don’t put off that root canal. It can be a good idea to make sure covered family members get their medical, dental and visual checkups as well.
If your health insurance plan comes with a use-it-or-lose-it flexible spending account, make a plan to spend every dollar you put into that account. If you don’t, the money you lose when the account expires could deplete or eliminate any tax dollars by contributing to the account. New glasses, snazzy prescription sunglasses, 148 boxes of Band-Aids… whatever it takes to get your money’s worth.
Employee assistance program
Many employers offer an employee assistance program, or EAP, that helps employees confidentially access counseling or other mental health services. EAPs can also help employees treat addiction or substance abuse, or provide support during difficult times (such as the death of a loved one). If your employer has an EAP, ask yourself whether you might benefit from any of its resources.
Some employers offer to pay for tools and training. Even if your employer requires you to share the cost of coursework, taking the time to earn a new certification or get a new degree can have huge benefits. You could potentially become more valuable to the company, and you’ll be able to take the skills and certifications with you when you apply for new jobs in the future.
Professional development resources like industry seminars or lunch-and-learns may not seem at first glance to have a tangible benefit, but they might give you the opportunity to meet other people working in your field. Remember, every person you connect with right now becomes a potential asset when you’re job hunting. That’s how networking works.
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Update your resume
Updating your resume, both in the literal sense (by adding your accomplishments to your resume as they happen) and in the figurative sense (by creating new accomplishments that you can add to your resume) is one of the best ways to make yourself recession-proof.
We’ve got a list of seven ways to improve and develop your career in 2019 that you can use to help you decide where you want to go next and how to get there. Remember, the best time to get a job is while you already have a job — so start planning for your next career move now, even if you’re currently happy with your position.
Establish a side hustle
Another great way to make yourself recession-proof: set up a side hustle where you’re your own boss. Building a part-time side hustle now gets you an additional income stream that you can put towards paying down debt or building up an emergency fund. Plus, it means you’ll still have money coming in even if you lose your primary job.
Although some people pick up side hustles working for someone else, such as driving for a rideshare app, you’ll have more control over your income if you develop a side hustle that’s completely your own. If you want to go the freelance or small business route, here are some tips to help you manage your finances as you build up your side hustle — and maybe turn it into your new career!
Nobody knows what will happen in the future, not even the people who work for the Washington Post or NPR. A recession may be on the way, or we may have another decade of financial growth. Still, taking steps to prepare for a recession now will help your finances and your career no matter when the next recession happens.
Now all you have to do is get started.
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Nicole Dieker is a full-time freelance writer. Her work regularly appears on Bankrate, Lifehacker, The Write Life and numerous other sites. She is the author of Frugal and the Beast: And Other Financial Fairy Tales. This article is sponsored by Haven Life Insurance Agency. Opinions are her own.
Haven Life Insurance Agency offers this as educational only, and the information provided is not written or intended as specific legal advice. Haven Life Insurance Agency does not provide legal advice. Individuals are encouraged to seek advice from their own legal counsel.