Our current environment and our most recent experiences have dulled the fear of recession and lulled many into complacency, writes investment adviser Terry Savage.
The financial and mortgage-driven crisis that started in 2008 has faded from memory, unless you were one of the many who lost their homes. Similarly, the bursting of the dot-com bubble around the turn of the century is memorable only for the impact on investors who valued “eyeballs” over profits.
Our most recent experience with potential recession occurred at the start of the pandemic in 2020 when the economy shut down abruptly. But that pain was alleviated by the immediate doubling of unemployment benefits and distribution of stimulus checks and PPP loans. In other words, the only way around this oncoming recession is through it. And you should be prepared.It’s possible that I’m overly pessimistic about the oncoming recession. But taking these steps will make you a winner, even if the economy sails easily through the next 12 months.So here are my suggestions:
—Deal with your debt. Pay down your credit card debt. Take advantage of this moment to switch to a zero-rate card, and then use the breathing room to pay down the balance. Rates on these cards will rise again for those trapped in debt. Search at—Build up savings. It’s always difficult to cut back. But now, while employees are still in demand, pick up a weekend job at a restaurant or bar. Use these extra earnings to pay down your debt; try to build a savings reserve.