\n<\/p>\n
The talk of the town over the last couple months has been the dreaded \u201cR\u201d word. Yes, I am talking about a recession. For those who don\u2019t know, a recession is two quarters, or half a year of negative growth in the economy. Technically, we are in a recession based on that definition. However, many have been reluctant to say we are in one, including our president and his administration.<\/a> When there is a recession, people lose their jobs and as of lately, the job market has continued to boom. In July alone, the economy added more than 528,000 jobs.<\/a> This, along with other signs, show that the economy is still quite healthy, in spite of some bumps and bruises.<\/p>\n Still others see this as one of very few signs that things are going well with the economy. High inflation and stagnant wages have put a damper on what was a rip-roaring housing market and stock market during the height of the pandemic. Whatever side you are on, there are things we should and should not do to prepare ourselves.<\/p>\n During times of uncertainty, one of the best things to be able to fall back on is the fact that if Murphy\u2019s Law decides to hit your doorstep, you are prepared with a cash reserve. Saving to fund an emergency fund is most definitely not as sexy as investing in tech stocks or the \u201cnext big thing\u201d, but it can most certainly help you avoid catastrophe, and keep you afloat.. As many Americans can\u2019t handle a $500 emergency without worry<\/a>, making sure your rainy day fund covers at least one to two months expenses, can help you rest easier during tumultuous times.<\/p>\n As recessions go, jobs may downsize, cut people\u2019s hours, or reduce pay in order to avoid going under. To be proactive, it is wise to prepare for a recession before it invites itself in the front door. Currently building up your professional skills can be a way to prepare for a recession. Now may be an optimal time to take that course you\u2019ve been wanting to take, increasing your leadership skills to take on more responsibility at work, and making yourself indistinguishable. During the early parts of the pandemic people left their jobs in droves and saw an increase in pay of almost 10%.<\/a> The opportunity to acquire more useful and transferable skills allows you to have more options, especially if things out of your control, like a recession, come to pass.\u00a0<\/p>\n Many people\u2019s investment portfolios have been torn apart over the first half of the year, even with a significant bounce in July. Now is a great time to reassess your investments and where your hard-earned money is going. Many people see their balances going down and fear can take over, making people do rash things that will be to their ultimate detriment. Ups and downs in the markets are both normal and healthy. The stock market, on average, has returned more than just parking money into a savings account, including with inflation. Time in the market always beats trying to time the market, so look at your investment plan, but don\u2019t let fear ravage your portfolio. <\/p>\n Side hustles have been all the rage over the last several years. Whether it\u2019s to pay off extra debt, fund a summer vacay, or to grow your emergency fund, these small jobs can make all the difference. As a recession may or may not be around the corner, being prepared for one with extra cash gives more flexibility and security. Some of the most common side hustles include DoorDash, babysitting, dog walking, and selling digital products. Other newly emerging side hustles include renting out your car, blogging, online coaching, and consulting work. Whatever yours may be, utilize that extra time you have to beef up your capital.<\/p>\n One sure way to be in a compromising situation during a recession is to take on more debt than you should. Evaluating what is necessary and what is possible is always a financial practice to live out, but even more so when times aren\u2019t as bountiful as usual. Examining our needs vs. our wants helps us to avoid making a purchase that will come back to haunt us. Patience practiced in a thoughtful and focused way is always rewarded.<\/p>\n An ARM, or adjustable rate mortgage, is often enticing to those looking for a lower interest rate when first purchasing a home. Unfortunately, in a rising interest rate environment, having an ARM is like having a grenade with the pin pulled and nowhere to throw it. Some may have seen the writing on the wall in early 2022, but those who decided to get adjustable rate mortgages are now going to be left \u201cholding the bag\u201d. To prepare oneself for when the music stops, sticking to a fixed-rate mortgage makes things a lot easier to navigate. <\/p>\n Recessions, poor stock markets, a slowing economy, etc. will affect all of us to varying degrees. How we manage debt, increase our income, and prepare for down times will make all the difference. If we stick to our plan, and reassess where our money is going we can weather the storms that come our way.<\/p>\n By Bryan Mapenzi<\/em><\/strong><\/p>\n If you\u2019re looking for more, join our very own\u00a0private accountability club, the Fab Fam Community<\/a>. It\u2019s the place to be for help with every aspect of your financial journey.<\/em><\/p>\n Not sure where you stand where you stand with your finances? Find out today by taking the\u00a0Money\u00a0Persona\u00a0quiz<\/a>.<\/em><\/p>\n<\/div>\nBolster your emergency fund<\/strong><\/h2>\n
Spruce up your resume<\/strong><\/h2>\n
Maintain your long-term investments<\/strong><\/h2>\n
Side hustles for extra cash<\/strong><\/h2>\n
Don\u2019t take on new debt<\/strong><\/h2>\n
Say no to an ARM<\/strong><\/h2>\n