With the US economy showing signs of uncertainty, investors are growing worried about a potential recession. President Trump’s recent statements have fueled concerns, but financial experts say there’s still time to prepare.
To avoid financial strain during a recession, three key steps can be taken: building an emergency fund, monitoring spending and income, and diversifying investments. According to certified financial planners (CFPs), these measures can help mitigate the impact of a downturn in the stock market.
Firstly, beefing up an emergency savings account is crucial. CFPs recommend saving between four to six months’ worth of expenses in case of job loss or reduced income. This can include cutting back on non-essential spending and prioritizing debt repayment, particularly high-interest credit cards.
Next, keeping a close eye on spending and income is vital. Reviewing budgets and identifying areas to cut costs can help make ends meet during tough times. CFPs also emphasize the importance of securing one’s income by acquiring new skills or exploring alternative sources of income.
Lastly, diversifying investments can help protect against market volatility. By spreading assets across a range of sectors and asset classes, investors can reduce risk and potentially ride out downturns in the stock market.
According to financial experts, these steps can make all the difference in navigating a potential recession. By taking proactive measures now, individuals can shield themselves from the worst effects of economic uncertainty.
Source: https://www.cnbc.com/2025/03/14/how-to-recession-proof-your-finances-according-to-cfps.html