How to Prepare for a Recession

By Lucas Caserez
Level Up Financial Planning

Do you know someone who can predict the future with 100% accuracy? Neither do I. So no one knows when the next recession is going to hit. A recession is not a fun time, but the reality is that one will eventually rear its head. Instead of hitting the panic button, the best thing you can do is to focus on the things you control. The awesome news is there are quite a few ways to prepare for the next recession whenever it shows up.

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  1. Understand where you stand financially today. Where are your resources and what is your burn rate (monthly spending).
     
  2. Establish and maintain an emergency fund with 6 months of living expenses. It’s a big ask, so break it down into smaller milestones.
     
  3. Be sure that any funding for short-term goals (less than three years away) is not invested in assets that could lose value.
     
  4. Develop skills that will make yourself a more valuable asset to your current and potential employers. Consider pursuing additional education/certifications related to your desired field of work.
     
  5. Strengthen your current relationships and establish new connections. This could help you maintain your current position or be referred to another opportunity.
     
  6. If you have a significant other, it is vital that you talk with each other both before and during times of crisis. This allows you to have an understanding of what is most important to each of you and prioritize these goals.

Lucas Casarez is a husband, father of two amazing kids, and a Certified Financial Planner™. He founded Level Up Financial Planning, which is one of the few fee-only financial planners in Northern Colorado. The mission of Level Up Financial Planning is to guide his clients in taking their financial confidence to the next level. 

Have a personal finance question you would like me to answer in a future week? E-mail askluketheplanner@gmail.com