There’s an aweful lot of talk about recession these days. You might have some questions coming up like; What is a recession? What impact will it have on me? and How do I prepare? Here’s a clear explanation to address some of your concerns along with a solid approach to prepare for a recession.
What is a recession? A broad decline in economic activity measured by;
- GDP (Gross Domestic Product) down two quarters in a row
- spending down
- employment down
Do the factors show we are in a recession now?
- GDP is down (yes)
- Spending is high (no)
- Employment is high (no)
What is the impact on me? Possibility of job loss.
How do I prepare? On average, recessions last 11 months. Here’s how to prepare:
- Budget both for your situation now and if income is reduced/eliminated
- Be prepared to leave the money you have in the market for the long run
- Hold bonds in your portfolio for stability
- Sell excess things you don’t need
- Build an extra savings cushion
- Prioritize and pay your debts
- Avoid/delay major purchases unless you’ve budgeted them in
Feel free to reach out if you would like a money partner to work with or to create a specialized approach for your situation. (808) 378-7808 or email@example.com.