- We aren’t officially in a recession yet, but we’re likely heading towards one, many economists are predicting a 2023 recession.
- With a little preparation, you can be financially ready if the economy officially enters a recession. Build up your emergency fund, work on your resume, and start diversifying your income.
- Many industries are recession-proof, and there are new opportunities that will open up as a result of the economic slowdown despite the short-term pain.
Many experts fear that an official recession is right around the corner. With inflation still rising, the Federal Reserve will likely raise interest rates to slow down the economy even further. If the economy slows down enough, we could easily enter a proper recession. A recession can cause a lot of pain for many folks, from the labor market to the stock market.
As stressful as the thought of a recession is, it’s important that you don’t panic. This is just part of the economic cycle. While the discomfort of a recession will be felt by most of us, there are ways to prepare. In this article, we’ll look at how you can survive a recession, so you can feel more confident about your finances as the economy continues to send us all mixed messages.
How does a recession impact you?
Many people are wondering how a potential recession could impact them personally. A recession is an extreme economic slowdown.
A recession could lead to a job loss or issues with employment (no bonus, reduced compensation, and so on) since companies have to adjust to a decrease in consumer spending. With less money in the economy, there’s less demand for luxury items, and people think twice before spending any money beyond the necessities.
The worst-case scenario for a recession is that unemployment could drastically increase. The Fed slows down spending, hiring, and wage gains by raising the cost of borrowing money. This means you could completely lose your income or have financial incentives taken away at work. This isn’t encouraging news, but we can’t ignore the reality of the situation.
The good news is that this economic cycle has not been officially called a recession just yet. Some would argue that it’s a stagnant economy and that a recession is approaching. That just means that you have to be prepared for the worst-case scenario, as there’s no telling how the battle against inflation is going to turn out.