This pandemic has been bad, but the economic fallout is going to be even worse. According to the BBC, the US economy sank 4.8% at the annual rate, marking its first contraction since 2014 and the downward spiral is only expected to accelerate. Since the lockdown, over 26 million people have filed for unemployment further hurting businesses. This is expected to create shock waves across the globe affecting economies everywhere. At this point a recession is not just inevitable, but is happening. This is a scary thing to think about, but like all crises we can prepare for the worst. Here are a few steps you can take to get ready for the recession according to two popular business/investment sites, Acorns and ￼Forbes:
1.) Pay Off Debts
If you are able, pay off as much debt as you can at this time whether it’s from your credit cards, student loans, medical debts, or anything that requires payments. Having as little debt as possible will make the recession far less stressful. ￼
2.) Keep an Emergency Cash￼ Fund
Cash is important in the event of an emergency and also for investments. Having a small cash fund stowed away in a safe place is a good idea even not during a crisis. ￼ A few ways to accumulate some extra cash include selling off items you don’t need, reducing your spending, and canceling any subscriptions you don’t use. ￼
3. Keep Investing
If you’re an investor don’t let the recession scare you into selling all your stock￼. According to Anthony Montenegro, The Blackmont Group founder, “The investment strategy that works best in a recession is to have little to no consumer debt, own cash, and have the guts to buy at the bottom of the dip. Economists aplenty have opined that a recession is coming in the next 18 months or so. The truth is a recession is always coming. The bottom line is that you will want to have made changes to your investment portfolio prior to the decline.”
4.) Update your Marketability
Take this time to update your resume, improved our skills, and make yourself marketable. Look into jobs currently hiring and have a back up plan in the event of job loss. Consider any certifications or career advancements that could help you during this time.
5. Find a Side Hustle
Finally, look into side jobs, passive income, and other ways to make a little extra money. Check your opportunities on sites like:
Remember, stay safe, don’t panic, and do some planning. We’ll get through this!