How to Prepare for an Economic Recession

An economic recession means that the economy shrinks for two quarters in a row, rather than growing or staying the same. While the idea of an economic recession brings worry to those who have never experienced a recession, it does not have to. It is important to prepare for an economic recession as best as possible to make surviving one easier. Here are some pointers to help you prepare for an economic recession.

Instructions

Difficulty: Moderate

1. Research your likely job stability and switch sectors if necessary. Jobs likely to survive a recession include health care jobs, government jobs and teaching positions, among others. Risky jobs include construction/ building jobs and jobs that rely on excess cash in the economy, such as those that supply or retail luxury goods.
2. Pay off debt and build up savings accounts. Since cash is tight during times of economic recession, it is important to prepare for the proverbial rainy day while you still can. Get rid of as much debt as possible, especially unsecured loans such as credit card balances and lines of credit. Small sacrifices now will have a large payback later.
3. Learn to live on less than your income. You may see pay cuts in your job during an economic recession, so look now for way to trim your budget as much as possible.
4. Downsize vehicles and sell luxuries such as jet skis and sailboats. During an economic recession you may not have the funds to enjoy these things. If you are able to sell them now, the money could go a long way to help you prepare for an economic recession. Skip your annual vacation as well as you prepare for an economic recession; put the cash in the bank.
5. Learn how to prepare food (bake bread and make chicken stock, for example), fix the roof and repair household items. Since an economic recession means that money will be tight, learn how to do the chores you regularly pay others to do.