A recession may be inevitable in 2024, but with the right preparation, you can protect your finances and come out stronger on the other side. Here are five essential steps to take:
1. Pay down credit card debt now.
High-interest rates and increasing defaults make it crucial to pay off your balances as soon as possible. Consider a low-interest personal loan or balance-transfer credit card to eliminate high-interest debt faster.
2. Stockpile savings and create an emergency fund.
With recession uncertainty, having a cushion is vital. Start by cutting expenses, increasing income, or both. If necessary, look for alternative housing arrangements, such as moving in with family or friends.
3. Establish a backup to your emergency fund.
Consider getting a home equity line of credit (HELOC) to access funds when needed. However, only use this option if your savings run out and ensure you understand the associated fees and interest costs.
4. Curb consumerism and reduce debt fueling.
Cutting back on non-essential spending can help alleviate financial pressure. By reducing consumption and actively saving money, you’ll be better equipped to weather a recession.
5. Don’t panic-sell when the stock market drops or try to time the market.
Stay calm during market fluctuations by adopting an objective approach to investing. Consider dollar-cost averaging to invest regularly regardless of market conditions. Instead, make a plan and invest as soon as possible to avoid missing opportunities.
By taking these proactive steps, you can protect your financial well-being and emerge stronger from a potential recession.
Source: https://www.washingtonpost.com/business/2025/03/14/tips-prepare-recession-economy-trump