How to Survive a Recession or Economic Downturn or Slowdown

If you’re worried about layoffs due to a recession or economic downturn, you can spend all your time stressing out over factors you can’t control. Or you can focus your energy on things that will put you in the best spot. Most of these things are good to do even when the economy is good — anyone can lose their job at any time.

How to Prepare Your Finances for a Recession

Build up your emergency fund — stock up on cash. Aim to have at least 3 months worth of expenses saved up, although a year will give you more breathing room.

Start a side hustle — diversifying your income stream is a powerful way to combat a recession or just build up extra money on the side.

Pay down high-interest debt. Even when times are good, carrying high-interest debt can have a very negative impact on your overall wealth.

Stop accruing more high-income debt. Stop using credit cards beyond what you can payoff every month.

If you have room in your budget, invest — when markets are down, you can buy low. Do your research before purchasing any stock. If your employer offers Employee Stock Purchase discounts, take advantage.

Do not panic with your investments —unless you absolutely need the money, do not sell your stocks or liquidate your retirement accounts. Assuming you have at least a few years until retirement, it is likely the accounts will rebound.

Make sure you understand your own risk tolerance. Find reputable resources to follow for advice.

Reduce your monthly expenses. If you aren’t already doing so, keep a budget and track every single dollar you spend. You might have recurring charges you forgot about, or not realize how much you’re spending on frivolous things.

Do a 30-day subscription challenge —pause as many subscriptions as possible for 30 days, then evaluate what you really miss and cancel the others.

Review your credit report and credit score — where do you have room for improvement?

How to Make Your Career More Recession-Proof

Learn a new skill. Is there a new skill that could take your career to the next level? That can make you more marketable in your annual reviews or job interviews? Check out learning modules on SkillShare.

Update your resume and LinkedIn profile. Add any recent impactful projects to your job description. Update your “About Me” with any new skills. Make sure you have a good profile photo.

Keep a Hype Doc — a list of your major projects, accomplishments, learnings, etc. Reference this document when updating your resume, doing job interviews, or during your annual performance review at work.

Connect with your network and continue to build new connections. Check your alumni network, attend industry events, join Slack and Discord communities. Reply to recruiters who reach out on LinkedIn, even just to say “thanks but no thanks for now.” Feel intimidated? Here is everything you need to know about networking.

Look up new job opportunities. Even if you don’t apply, get an idea of what jobs and skills are in demand. Maybe revisit the idea of learning new skills.

Stay sharp for interviews. Interviewing is a skill, and it’s important to prepare and practice for interviews so that you can perform well even with short notice when scheduling an interview.

How to Manage Your Expectations During a Recession

Remember that recessions are a normal part of the economic cycle. This won’t be the only one you experience during your lifetime. But the economy always recovers.

Prioritize your health. Start or continue getting regular physical exercise. Eat nourishing foods. Stay hydrated. Keep up with your medical appointments.

Spend more time with friends and family — anyone who is a positive influence on your life. Keep showing up for your meetup groups and clubs. Keep making plans with friends. Call your parents.

Focus on healthy things that calm your mind. Go for walks. Get fresh air. Meditate. Write in your journal. Do yoga. Schedule an appointment with your therapist if that helps you.

Don’t get sucked into fear-mongering. Find news sources that aren’t sensational. Close social media apps that are full of doom and gloom.

Remember the average recession lasts around a year to a year and a half. Recessions are temporary, but the good habits suggested above will last a lifetime.

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