What are the key things you need to do to protect yourself financially in the event of a recession?
1) Keep your emergency reserves in cash. This should be 3-6 months of expenses in a savings account or high yield savings account. If you are nearing retirement, it will need to be more. Don't be tempted to invest your emergency fund. It's a bad idea.
With current interest rates, a high yield savings account absolutely makes the most sense. Mine is paying 3%!
2) Mind your debt burden. High interest debt needs to go NOW. Make any sacrifice possible to pay off your high interest debt, particularly credit card debt. Low interest student loan debt is different and should find a different place in your money plan, particularly federal loans at the current 0%.
THIS IS THE TIME to get incredibly aggressive with paying off any credit card debt.
3) Stick with your investing strategy. Your stock/bond allocation should make sense for you in general, regardless of the market. You should be dollar cost averaging and buying through any bear market (these are the dollars that will make you the most money). If this sounds like Japanese to you, you need to create a written investing plan.
Join the waitlist for Money Boot Camp for White Coats to make sure you're ready with your savings, investing strategy, and a plan for your debt! The course is currently full, but you can sign up to get notified about the next round of openings.
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