How to Prepare for a Recession: 8 Tips You Can Start Now!

wealthdart.com Rahul Paragi Green Curved Line

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1. Reassess Your Budget Monthly

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Evaluate your budget every month to see what expenses could be kicked to the curb. Are you spending too much on clothes? Cut them out.

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Only buy what you need and opt for generic over name-brand products to save a couple extra dollars.

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2. Contribute More Towards Your Emergency Fund

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After cutting out unnecessary expenses, increase your savings budget as much as you can.

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Ideally, 20 percent of your income should go to your savings, and 30 percent to “extra” expenses like your subscriptions and memberships.

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After slimming down your extra expenses, set up higher automatic payments to your emergency fund. If you lose your job or have car troubles, you’ll have your emergency fund there to help out.

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3. Focus on Paying Off High-Interest Debt Accounts

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Track each debt account you have using our app to see how much you owe and your various interest rates.

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Focus on contributing more of your income to debt that holds the highest interest rates.

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While doing so, consider paying off tax deductible debt accounts, like educational loans, to get cash back during tax season.

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4. Keep Up With Your Usual Contributions

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Whether you already have a 401k set up or not, try to maintain your budgeted contributions.

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It can be intimidating to put money in while a recession is looming, but keeping up with these can benefit you in the long-term.

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During volatile times, try to avoid checking your performance each day to stay at ease with your future goals in mind.

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5. Evaluate Your Investment Choices

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Whether your investments are doing well or not, avoid making emotional money decisions.

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If the market takes a turn for the worse, consider riding it out for any upswings. Reach out to a trusted financial advisor before making any huge changes.

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6. Build Up Skills On Your Resume

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Use free online learning platforms like YouTube, expert guides, LinkedIn courses, and assessments to boost your resume.

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Show off your skills during meetings to show your employer your value.

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Add every certificate you earn along the way to your resume — this will help prove your eagerness to learn. Increasing your skills could, in turn, increase your value and earning potential.

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7. Brainstorm Innovative Ways to Make Extra Cash

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Whether things are heading towards a recession or not, consider starting a passion project to bring in supplemental income.

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Invest time in creating an ebook, online course, or blog on a skill that you’ve mastered and could use to earn passive income.

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Directly deposit your side hustle earnings into your savings account for an extra financial cushion.

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8. Prioritize Online and In-Person Networking Events

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Master your digital and in-person networking skills by attending networking events each month.

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Meet with industry professionals to offer your skills, learn from them, and establish long-lasting business connections.

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Down the road, these connections could open up career opportunities or expert-level business advice.

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Once you've gotten the basics and foundation down, there's no limit to what you can build. Floral