A number of economic signs are currently negative.
- Many experts are issuing warnings about a coming recession.
- The Institute for Supply Management notes that manufacturing growth is at its lowest in two years, another indicator that a recession could be on its way.
At this point, consumers are increasingly accepting the idea of a recession hitting the economy in 2023. Not only is soaring inflation depleting consumer finances, but interest rate hikes from the Fed to calm inflation can lead to a general slowdown. in expenses. And in another sign that a recession could be imminent, U.S. manufacturing growth recently hit a two-year low, according to the Institute for Supply Management.
If you’re worried about a recession, it’s worth doing what you can to prepare for it. Here’s how.
1. Consolidate your savings
The scary thing about recessions is that they can lead to a lot of layoffs across a whole range of industries. And losing your salary could mean losing your ability to cover your living expenses.
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That’s why it’s so important to boost your personal cash reserves if you fear a recession is near. At a minimum, you should aim to have enough money in your savings account to cover three full months of living expenses. And if you want extra protection (which wouldn’t be a bad thing right now), aim for six months of spending in the bank — or more.
The reality is that it is difficult to predict how long a given recession will last. To be fair, we can’t even say for sure that a recession will definitely hit next year, so it’s pointless to speculate on how long it will last. But it’s worth noting that some economists are calling for a rather prolonged decline, which is all the more reason to give your savings account a solid boost in the months ahead.
2. Develop your professional skills
Getting better at what you do doesn’t guarantee you won’t be fired if your company is forced to downsize. But he could help you stay off the chopping block in the event of layoffs.
Think about the skills most essential to your job and work to improve them. But also, don’t overlook the importance of developing your soft skills – those that apply to any job. Soft skills include things like time management, organization, and communication.
3. Consider a second job
If you’re working full time right now and managing your bills well, you might not feel like you need to overload your schedule by rushing for a second job. But securing one could work to your advantage.
For one thing, that extra money could help you increase your cash reserves so you have more of a cushion. And also, this side gig could serve as a fallback option if you lose your full-time job and need some way to make money until you find another.
The fact that several signs point to a short-term recession is frightening and frustrating. But the best thing you can do for yourself is to prepare yourself by bolstering your savings, making yourself a more valuable asset to your employer, and finding a second job, even if you don’t really need it. the moment.
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