How To Prepare For Another Recession: 19 Quick Tips

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That's exactly how I felt when The Great Recession came around and wiped out the dreams I was sold for my 22 years on Earth so far. As a recent college graduate in 2008, I had nothing to lose, but it also felt like there was nothing to be gained. 

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Fast forward fourteen years and a pandemic into the future, and it sometimes feels like a cosmic joke on my fellow elder Millennials and me. 

Every time we pull ahead a little—and feel the caress of a little comfort—another disaster comes around. We weren't ready for another economic downturn, especially when we were barely rebounding from the last one. 

Let's dive in. The water is scalding hot and actually, it's lava! 

What is a Recession Anyway? Making Sense of a Negative GDP 

If you search "What is a Recession", you'll most likely learn that a recession is a period of weak or negative GDP. Then, if you're like me, you proceed to Google GDP, but you still aren't grasping it. 

Finally, you're searching "How to explain GDP to a child" and, bingo, you're starting to understand it—and it all sounds so annoyingly familiar! 

Thanks, Kids Brittanica! 

Per Forbes, recessions are caused by a number of financial drivers, including:

How Long Do Recessions Last?

Recessions can vary in length. However, the average lifespan of a recession is 11 months. Surprisingly, the shortest recession in U.S. History happened in February 2020 and lasted only two months. 

How Will a Recession Affect Me?

The most widely felt effect of a recession is job loss. While rising unemployment rates often accompany a recession, many people experience job loss, layoffs, furloughs, or even company failure. 

Because so many people are experiencing simultaneous job loss, this makes it difficult to find a new job. For those lucky to keep their jobs, recessions may see pay cuts, reduced benefits, and a moratorium on any pay raises. 

Folks with investments in stocks, bonds, real estate, or other assets can lose a great deal of money in a recession. 

The ripple effect only expands from there. People who can no longer afford mortgages can lose their homes. Banks and lenders tighten their proverbial belt loops, making borrowing near impossible. 

There is one bright side to most recessions. They are typically followed by a period of strong economic growth. In fact, many economists argue that the strongest period of economic growth for the U.S. happened on the heels of The Great Depression. 

10 Ways to Prepare Your Finances for A Recession

Well, gang, we have had some practice with the coronavirus pandemic, The Great Recession, and even the dot com bubble. It's been real! 

So how does someone without an investment portfolio protect themselves from the job loss, market volatility, and stressors of another recession? 

1. Know Your Monthly Expenses

Write it all down. Take note of every recurring bill, every annual bill that always sneaks up unexpectedly, and every bill that you might be able to put on the chopping block. 

Take stock of your rent, your utilities, your groceries, your entertainment, your debt, and every necessity and non-necessity. 

Know what it costs to live a month's worth of your life and then...

2. Cut Our Your Lifestyle Creeps + Unnecessary Recurring Charges

When you look back at a month of spending and see what you probably could have done without, do something extra heartbreaking. Add up what you could have avoided spending because you wanted to DoorDash instead of throwing one burrito in the microwave. 

We're not perfect and we'll all have a charge or two that could he been avoided, but look out for patterns of the old lifestyle creep. It's those bi-weekly dip manicures (seriously, I only learned what a dip manicure was about two weeks ago!), it's the rideshare-when-you-absolutely-could-have-taken-the-train, and it's the sweater you had to have in three colors. 

Once you know your monthly expenses, avoid lifestyle creep and unnecessary spending with simple awareness. This becomes really helpful when we get to point number four. 

3. Start an Emergency Fund (+ I Don't Care How Small You Need to Start!) 

Don't freak out, but most financial experts recommend having an emergency savings readied with 6-9 months of expenses. 

If you're like me, then reading a number like this can seem so daunting that you just buy a new dress, because what even matters anymore? Don't do that. Please, please start small, because it makes a huge difference. 

f you can dedicate 2% of your monthly paycheck to savings every month, try it. Have those funds automatically deposited in a savings account and don't touch it. Once you get used to 2%, turn the lever to 4%. When you get a raise, dedicate a portion of it specifically to your savings.

4. Create Budgets for Everything 

Don't create budgets so that you feel bad when you go over them. Create budgets so that you are aware of the money you're spending and why. 

Make it a weekly practice to mind your budget. Note what you didn't need to spend, what was absolutely crucial to spend, and the items that are up for debate. 

Here's the thing most finance experts won't tell you. That dinner with your best friend where you doubled over laughing tears of happiness was probably worth every cent you spent. When you're keeping a close eye on your dollars, you familiarize yourself with why you're spending and its impact. 

5. Damage Your Debt

I hate debt. It's so BORING and yet, it's what I think of most when my head hits the pillow. 

Get it out of the picture. If you're a lover of credit cards, but they're all close to maxed out, you know what to do, Get the scissors out, un-"remember" your credit card numbers on devices, and start paying it down. 

Just like saving, debt payoff can smart small (but you definitely must match the minimum for your credit score's sake) and pay down high-interest debt like credit cards. 

6. Talk to Your Credit Card Companies

I know, I don't want to make any phone calls, either. However, if you're saddled with high-interest credit card debt, one phone call can make a huge difference. 

Credit card companies are the very best at making passive income. At the end of the day, they want to keep their customers outfitted in their plastic. 

Call your credit card company to discuss renegotiating your annual percentage rates (APR). You might even be able to open a balance transfer credit card that allows you to pay a much lower interest rate on your existing debt. Give 'em a call! 

7. Actually Talk to Everyone

While I have you on the phone, call everybody. Call your landlord. Call your internet provider. Call your cell carrier. Give it a little Karen energy, but always be respectful to the human being on the other end of the line. If I hear that any of you were being rude to customer service representatives, I am going to be so disappointed. 

Bottom line? Any monthly bill you're paying can likely be negotiated down. Try it out. 

Talk to your boss, too. Take a temperature check for your organization. Does your company seem safe from massive layoffs? Does your job seem recession-proof?

Especially if you're an entry-level or recent hire, take the time to discuss how you can best utilize your skills to stay aboard. While the effects of a recession are far-reaching, it's a substantially less stressful period of time for someone who remains employed—especially at an organization where they can have open discussions with leadership. 

8. Ditch Your Luxury Friends

As I near the end of this list, I am feeling more ruthless. We love our luxury friends. We love their smooth, glowing skin. We love their new handbag of the week. We love their kitchen remodel. 

However, we're not likely to relate too much to the luxury friend as the economy takes a nosedive. I'm not telling you to dump a friend simply because they are more financially equipped than you might be at this moment. 

What I'm saying, instead, is to skip the dinners and expensive nights out with the friends who never worry about finances. Your checking account will breathe a high sigh of relief. 

9. Keep Your Retirement Savings Going

With news of a potential recession, it's tempting to put your retirement strategy on hold. Don't. Keep contributing to your retirement fund. You'll need it. 

10. Remember to Breathe 

It's really stressful. When threats of a recession bubble up, it can feel like you're going to lose everything you've worked for up until this moment. 

As an "elder Millennials", soaring housing prices and another freaking recession can sometimes feel downright personal. Can I have one five-year period to really get my finance in order or what? It's not personal. 

Just like you'll want to remain mindful of your finances, be mindful of your physical, mental, and emotional stress. We'll make it through (again).

9 Ways to Prepare Your Career for a Recession

Now, let's get into protecting your job, creating new streams of revenue, and taking advantage of any help you can find. 

1. Audit Your Skills

Know your skills, especially as they relate to crucial and essential work. For example, if you are your company's sole accountant—and you're a spreadsheet wizard—you have a really valuable set of skills. 

Make a few lists of your skills, including the skills you may not necessarily be utilizing in your role at this moment. Some of the most proven recession-proof skills are soft skills, hands-on hard skills (hello, tradespeople!), and technology skills.

Ensure you're keeping up-to-date on your technology skills and letting your boss know about the other skills you might have, the skills you aren't using now. 

2. Now, Expand Your Skills

Remember the accountant with the magic spreadsheet skills? If there is a lucrative program you can learn, now is the time to do it. Take advantage of online courses, YouTube, and industry professionals to keep up to the minute with the skills your job requires. 

Once you've finished a course that licenses you as another master of spreadsheets, tell the town! Update your LinkedIn profile, notify your boss, and implement your new skills into new, sleeker reports. 

In short, learn the most lucrative skills and tell everyone about it. 

3. Look Backwards

If you were in the workforce during The Great Recession, you remember how it went down. For many of us, we sighed a relief every Friday at 5 pm for two reasons. The week was over, and we somehow still had jobs. 

If your organization existed in 2008, talk to leadership about it. How did they navigate the downturn? What kind of layoffs did they implement? What would they have done differently? Do they have a plan in place? 

If you can gather the historical impact at your company, do it. If your company was born after 2009, you can study the impact of the last recession on similar positions. Was your position laid off across the board or did your would-be peers typically remain employed?

Google what happened. Ask others how it went. This can help you figure out your next steps. 

4. Create Touchpoints

I'm calling the theme here, "Keeping in touch." Create weekly touchpoints with leadership so that you can stay "in the know" as much as possible—without being a nuisance. 

If there are projects that require an "all hands" approach, raise your hand. In the interest of protecting your job, the key is making yourself a known entity—and an indispensable one at that! 

5. Be Adaptable 

This tip piggybacks on the last one. Once you've communicated that you're ready and willing to try new things, do so. Without working to the point of burnout or becoming a doormat for leadership, be adaptable and helpful, but there's more. 

So far, I've been focused on telling you to basically light up the flares so leadership knows your name. However, this is not Survivor and you should not be ready to trample your coworkers to save your job. Being adaptable means being a team player. It's helping colleagues work through problems. It's giving your opinion or advice when you hit a bump in the road. 

Don't mistake a recession for a chance to go full-apocalypse mode and trample your coworkers in the process. 

6. Network for Freelance Opportunities 

Reach out to others in your industry.

Look for freelance opportunities in your field and build relationships that way. When recessions hit, employers are less likely to hire full-time talent, so landing a freelance opportunity or two can be the trick to make you indispensable to a few organizations. 

7. Watch LinkedIn 

As a recession creeps near, you're likely to see news stories pop up every day—massive layoffs, budget cuts, and suspended hiring will echo through your mind. 

Keep up with this news. What do the companies enacting mass layoffs have in common? Did they recently complete a ton of fundraising? Are they beholden to a mammoth valuation? Are they an industry that typically sees downturns once folks have less money to spend? 

Keep yourself on top of the news when it comes to layoffs. 

8. Always Be Prepared

You can do all these things and still be stunned by a surprise layoff. Protect yourself. Even if you have all the correct conversations with your boss, even when you have all the best skills, and even when you've performed your role better than anyone, layoffs can happen. 

As someone who has survived layoff and who has been laid off, I can tell you it's never a picnic for anyone involved. Do everything so that you're always prepared to start a job search tomorrow—recession or not. Here's what you can do to prep for a layoff (just in case) 

9. Breathe Again

Thinking about another recession is absolutely nerve-wracking, but breathe.

Layoffs are common, and they should not be a source of shame. In fact, 40 percent of American workers have experienced at least one layoff in their careers. It's not personal. It doesn't reflect you as an employee. You will make it through this. We're here for you. 

If you're experiencing anxiety in relation to an impending recession and you can't find the content you need, please feel free to email us or DM us on Instagram. We're here to help!