Cut back on high-interest debt
Credit card APRs are often over 20%. If a recession hits and your income drops, that kind of debt becomes a massive burden fast.
What to do now:
Pay down variable-rate debt aggressivelyConsider a 0% intro APR balance transfer card if you need breathing roomSkip extra investing until your high-interest balances are under control
Some of the best recession protection is just not owing money to a credit card company. Simple as that. You can get nearly two years interest-free with some of the best balance transfer credit cards — check out our list here.
Don’t panic-sell your investments
Market dips are scary. But history shows that trying to time the bottom usually backfires. Long-term investors who stay the course tend to come out ahead.
If you’re investing for retirement, keep contributing. If you’ve got short-term goals, like buying a house in a year or two, that money shouldn’t be in the market anyway. Historically, the S&P 500 returns about 10% annually. Short-term drops are just part of the ride.
And there’s never a bad time to start investing. Pick one of the best online brokers and start thinking about your retirement.
Diversify your income if you can
One income stream feels fine, until it’s not. Even a small side hustle or freelance gig can give you financial stability when the economy wobbles.
Some ideas to explore:
Remote freelance platforms like Upwork or FiverrPart-time consulting or tutoringSelling a product or service locally (or online)
You don’t need to launch a full-scale business. You just need enough to give yourself options if your main paycheck becomes less reliable.
Recession or not, it pays to stay ready
We might avoid a full-blown recession. Or we might not. Either way, the steps above put you in a better position no matter what happens. Building cash, cutting risk, and keeping your cool can help you ride out whatever the economy throws our way.