With the media predicting a recession, it is understandable that you might get nervous. After all, a recession can impact everything from your investments to your job security. However, watching and waiting with fear as a possible recession approaches won't do you much good. There are practical steps you can take to prepare for the possibility of an economic downturn and alleviate your stress about the situation.
Start a "rainy day" fund now
Life is full of unexpected surprises, and sometimes they are costly. If you have to deal with an unforeseen expense, like needing to buy a new laptop or pay for a car repair, a rainy day fund is great to have. Bank of America offers tips for saving more money, such as recording your spending and identifying where you can cut costs, reviewing recurring charges, and setting short- and long-term savings goals. Automating your savings can also help.
Eliminate as much debt as you can
If you are worried about a recession cutting into your earnings, the thought of carrying ongoing debts can be troubling. Look for ways to tackle your debt now to alleviate the mental burden. For example, you might increase your debt repayment percentage, use savings to pay down large or high-interest debts, or even renegotiate your interest rate. You can also sell items you no longer need, or use your tax refund check to pay off outstanding debts.
Cut spending and look for a side hustle
You can increase your savings and pay off debt more easily if you are earning more and spending less. There are tons of ways you can save money on monthly bills. For example, sometimes switching suppliers for basics like electricity can save you money. You can also look for a side hustle so that you have more money coming in. Options include driving for rideshare or food delivery services, freelancing online, or upcycling old goods.
Protect your assets like your home
If a recession hits, you want to make sure your assets are protected. For example, if you have money in stocks, diversifying your investments can be a wise move. Also, consider your tangible assets. If you own property, taking out a home warranty can help protect its value. This pays for repairs and replacements to essential systems like plumbing, electric, and heating and cooling. Here are some appealing options to consider when shopping around.
Master stress-coping techniques
Financial troubles can be a cause of stress. Unfortunately, stress can seriously impact your quality of life, making it hard to concentrate or sleep at night. Be prepared to tackle potential stress head-on by mastering stress-coping techniques like meditation. The practice is shown to reduce stress and even addresses physical indicators of stress, like high blood pressure. If you are new to meditation, try using a guided meditation app like Headspace to get started.
Take care of your physical health
Another thing you can do to protect your mental well-being during a recession is to take care of your physical health. Make a point of exercising regularly, eating well, and sleeping enough. These steps will improve both physical and mental well-being. There are also practical elements to consider: A healthy lifestyle is a preventative measure and safeguards against diseases that are more costly to treat. Investing in your health now is smart.
The thought of a recession can be nerve-wracking. However, if you take preparatory steps like protecting your assets and saving, you'll be ready. Just as important, make sure to take care of your health. Stressing about the situation will make it feel less manageable.
Brad Krause created Self Caring after years spent putting his own self-care on the back burner. His goal now is to educate people on the importance of self-care by providing tips and tricks that are easy to implement.