There’s a lot of talk in the news about whether the United States economy is headed for—or is already in the midst of—a recession. For many people, the talk of recession brings back bad memories from the 2008 financial collapse. Recession can be a frightening subject, and some of that anxiety comes from not understanding what “being in a recession” specifically means.
Economists identify cycles in the way our nation’s financial state develops, as a whole. It’s common for periods of growth and periods of decline to follow one another. Here’s a simple overview of how these two periods differ from one another:
- Growth — High rates of employment, low interest rates, lots of new production, a general increase in spending
- Decline — Unemployment rises, high interest rates, stagnated production, a widespread drop in spending
The period of decline is referred to as a recession. In some ways, it can be seen as part of a natural balancing act, because unchecked growth would lead to prices going up, up, up—in other words, inflation.
The reason many people believe the United States is headed for a recession is because of the inflated price of everything from gas and rent to movie tickets and dining. Others argue that the United States has already entered a recession because of the currently high interest rates and increased layoffs at major companies. Whether it’s about to happen or is already happening, it seems clear that the economy is facing decline. Be prepared by following these career and personal finance tips to make you more recession-proof.
Career advice for navigating a recession
When economic decline is the general trend, it affects every industry. So don’t be caught unaware—the best career advice during a recession is to expect the unexpected. Layoffs can occur all the way up and down the business chain, from the global tech giants to the local retail outlets.
Your best move is to update your resume, references, and professional portfolio before you see the signs that a layoff may be heading your way. If you are unfortunate enough to lose your current position, the transition period to finding a new job will be much quicker with your supporting documents ready to go.
If you want to worry a lot less about job security, consider entering a new field that is less volatile, meaning it’s less affected by the fluctuations of the economy. These jobs are the kind that are always in demand, no matter the circumstances of the market, like teaching/childcare jobs, healthcare jobs, and computer engineering jobs.
Make the switch much more easily by learning new skills and networking with professionals on Meetup. Discover career development communities such as:
- Seattle Learning Community | Flatiron School
- Healthcare Entrepreneur Meetup Group
- Boston Traders Meetup to Teach/Learn Trading Strategies
- Art Teacher Collaborative
- Beers with Engineers (Chicago)
How to stay on top of personal finance during a recession
Keeping track of your spending is always important, and for some people it can be a real lifeline during a recession. Personal finance isn’t rocket science, it just takes consistent effort and determination. Here are a few of the building blocks of stable finances:
- Lower expenses — Do what’s possible to lower the amount you regularly spend in a day, week, or month. You don’t have to cut corners with the essentials, but consider cooking at home more often or conserving gas with alternate modes of transportation.
- Pay down debt — Lots of people have some form of debt, from student loans to credit card bills and beyond. Debt can feel overwhelming, especially during a recession, but ignoring it will only cause the problem to grow. The best approach is to set aside whatever amount you can manage each month to pay down debt. If you have multiple sources of debt, always prioritize paying down the higher interest debt first. Over time, it could save you thousands.
- Create a few budgets — Compare your income with your expenditures and create some spending guidelines for yourself. Try coming up with three potential budgets: comfortable, tight, and minimum. A comfortable budget has the most room for money spent on fun and the least percentage of savings. A minimum budget is mostly concerned with getting by and saving as much of your income as possible. A tight budget is somewhere in between.
- Don’t go it alone — There are millions of people just like you who want to take control of their personal finance. Find a supportive and knowledgeable group and learn more about saving strategies, investing, retirement planning, and more. Check out communities like Chicago Financial Education Meetup Group, Greater Philly Women and Finance Meetup Group, and Atlanta REI Meetup. Many Meetup finance groups host virtual events that you can attend from anywhere, often for free!
- Take breaks — Clearly personal finance is a vital aspect of daily life during a recession, but that doesn’t mean you should worry about it 24/7. As you begin to develop a solid budget and explore career options, remember to live the part of your life that has nothing to do with money. Find a purely social community that will provide you with something fun to do, no matter the state of the economy. You can even create your own chill hangout and relaxation Meetup group and invite others to join you.
Last modified on August 29, 2022
