What's Happening
15 mins ago

Is Spirit Airlines Worth the Gamble Amid Bankruptcy Fears?

foolfool.com
21 mins ago

Is Nu Holdings Stock a Buy Before Nov. 13?

foolfool.com
27 mins ago

SoFi Stock Sinks Despite Upbeat Outlook. Should Investors Buy the Dip?

foolfool.com
33 mins ago

3 No-Brainer Warren Buffett Stocks to Buy Right Now

foolfool.com
39 mins ago

Is UPS Stock a Buy?

foolfool.com
43 mins ago

Should You Buy Nvidia Stock Before Nov. 20? The Evidence Is Piling Up, and Here's What It Suggests.

foolfool.com
45 mins ago

Don't Forget About These 2 Required Minimum Distribution (RMD) Rule Changes for 2024

foolfool.com
45 mins ago

Should You Ignore Chevron and Buy This Magnificent High-Yield Energy Stock Instead?

foolfool.com
1 hour ago

1 Wall Street Analyst Thinks The Trade Desk Stock Is Going to $150. Is It a Buy?

foolfool.com
2 hours ago

1 Little-Known Social Security Rule Could Boost Your Monthly Check Up to 26.7%, Even if You're Already Collecting Benefits

foolfool.com
2 hours ago

1 Little-Known Social Security Rule Could Boost Your Monthly Check Up to 26.7%, Even if You’re Already Collecting Benefits

retireretire.ly
2 hours ago

Trump Vs. Harris: A Nail-Biting Pre-Election Showdown

benzingabenzinga.com
2 hours ago

Kim Jong Un's Sister: Ukraine And South Korea Are 'Bad Dogs' Bred By US

benzingabenzinga.com
2 hours ago

Trump's Provocative Rhetoric Fuels Gender Dynamics

benzingabenzinga.com
3 hours ago

Is Nvidia a Buy?

foolfool.com
3 hours ago

Don't Ever Use This Word Around Mark Cuban: 'You Sound Stupid ... Because You're Trying To Sound Smart'

benzingabenzinga.com
3 hours ago

Will ASML Be a Trillion-Dollar Stock by 2030?

foolfool.com
3 hours ago

Elon Musk's Mother Does Harris Impression During TV Appearance

benzingabenzinga.com
3 hours ago

Where Will C3.ai Stock Be in 5 Years?

foolfool.com
4 hours ago

Scaramucci Says Trump 'Should Be Taken Into Custody' Over Alleged Threat Against Liz Cheney

benzingabenzinga.com

A Recession May Be Coming. Here’s How to Prepare

A calculator, pad, and pen against a yellow background

Image source: The Motley Fool/Upsplash

When the Federal Reserve raised its benchmark interest rate numerous times in 2022 and 2023 to fight inflation, the fear was that higher loan and credit card borrowing rates would lead to a decline in consumer spending and cause a recession.

But that hasn’t happened so far. The economy has remained resilient despite the Fed’s rate hikes. Plus, the Fed has already started cutting its rate in response to a slowdown in inflation. So you’d think we’d be in the clear as far as a recession goes.

In spite of that, the Federal Reserve puts the probability of a recession in the next 12 months at 57%. And while that doesn’t guarantee that things will take a turn for the worse in the coming year, it’s still something everyone should prepare for. Here’s how you can get yourself recession-ready — and minimize your stress if economic conditions do, in fact, decline.

1. Boost your savings

Economic recessions aren’t always painful and drawn-out. But they can lead to an increase in job loss. To prepare for that, aim to boost your savings so you have enough money to cover at least three full months of essential expenses. That way, if you were to lose your job, you’d have a way to pay your bills without having to resort to expensive credit card debt.

The good news is that savings accounts are still paying pretty generously these days, so you can earn a nice return on the money you’re keeping around for emergency fund purposes. Click here for a list of the best savings account rates available today.

2. Grow your job skills

Losing your job can be a scary thing. But the more professional skills you have, the easier it becomes to find a new role.

If you’re concerned about job loss, first decide if you want to stay in your current industry. If you do, consider some of the skills you’re missing that could help you get hired elsewhere in a similar position.

If your job tends to require presentation skills but you’re not good at that, you might consider taking a course in public speaking. If you have an IT job and there’s a popular programming language you’re unfamiliar with, learn it.

At the same time, don’t underestimate the value of networking your way into a new job. Often, getting hired boils down to having the right connections. So take the time in the coming weeks to check in with former bosses and colleagues. That way, if you end up needing to call in a favor, it won’t be out of the blue.

3. Reduce expensive debt

The less debt you have, the easier a layoff situation becomes. You won’t strain your emergency fund as much if you’re able to reduce your debt payments now, so take a look at what those are and figure out how you’ll whittle them down.

Generally speaking, it’s best to focus on paying off variable-interest debt like credit card balances first. Credit cards are notorious for charging high amounts of interest, so if you can reduce your balances, you’ll gain some peace of mind while saving yourself money.

One option for paying off credit cards is to consolidate them into a personal loan. The benefit is that the interest rate you pay on a personal loan will likely be much lower than what your credit cards charge you. And your loan payments will be fixed, which may make them easier to work into your budget. Click here for a list of the best personal loan lenders.

Another option for reducing credit card debt is to do a balance transfer, where you move your existing balances onto a single card — and, ideally, one with a 0% introductory interest rate. Getting a break from accruing interest could make it easier to pay off your debt. But do know that once your introductory period comes to an end, the interest rate on your credit card might soar.

So shop around for a longer introductory period. Some credit cards give you a break on interest for more than a year. Click here for a roundup of the top balance transfer credit cards.

The idea of a coming recession may be scary, and understandably so. The good news is that there’s no guarantee the economy will decline in the coming year, despite the Fed’s projections. But it’s always best to play it safe and prepare for a recession by taking these key steps.

Alert: highest cash back card we’ve seen now has 0% intro APR into 2026

This credit card is not just good – it’s so exceptional that our experts use it personally. It features a 0% intro APR for 15 months, a cash back rate of up to 5%, and all somehow for no annual fee!

Click here to read our full review for free and apply in just 2 minutes.

We’re firm believers in the Golden Rule, which is why editorial opinions are ours alone and have not been previously reviewed, approved, or endorsed by included advertisers.
The Ascent does not cover all offers on the market. Editorial content from The Ascent is separate from The Motley Fool editorial content and is created by a different analyst team.The Motley Fool has a disclosure policy.

Related Posts

Retirement accounts like 401(k)s and IRAs offer valuable tax breaks, but they also come with a lot of rules. These rules apply not only to

You might not realize it, but your Social Security check isn’t set in stone once you claim benefits. On top of the annual COLA, which

Image source: The Motley Fool/Upsplash Most credit cards make it expensive to borrow money. On credit cards that are charged interest, the average rate is

Image source: Upsplash/The Motley Fool Mortgage rates are lower today than they were a year ago. Last October, the average 30-year loan rate was over