How to Recession-Proof a Household Budget

Many things in life are unpredictable. You can't really predict what the economy will be like in six months, but there are certain things that you can do to recession-proof your household budget in case things take a turn for the worse. With a little planning, you can rest a bit easier at night knowing that your money will stretch a bit longer.

Instructions

Difficulty: Moderate

1. Know the facts about your job. Some jobs are more stable than others, and it's important to look to the future when preparing for a recession. Health care and teaching jobs are usually safe, while jobs that depend on the economy, such as construction or retail, may face cutbacks and layoffs in a recession.
2. Get rid of debt. While it's easier said than done, the less debt you have in your name, the better off you are financially. Try to pay down high-interest credit cards and other revolving credit lines first.
3. Figure out how much you need to get by. When inoculating your budget against recession, it's important to calculate your fixed costs. This should include things like mortgages, utilities and food. Once you know how much you need to have to live on, you can focus on decreasing luxury spending like eating out and entertainment.
4. Stash away any extra. It's much easier to save when the economy is good, so try to set aside a little each month. Then, should the economy take a downturn, you'll have a cushion to get you through until the economy improves.