It's not a question of "if" or even "when." It's also "why."
5 Warning Signs That a Recession is Coming – And What You Can Do About it
Predicting recessions is like predicting the weather. You can't say exactly where and when the storm will hit, but you can get pretty close – and give people in its path time to prepare.
As a CPA, author, and financial counselor for more than two decades, I've seen my share of recessions big and small. Since my specialty is in helping people get out of debt, and since debt is what causes most recessions (think housing bubble), I can often see recessions coming. Like the weather service, I can't give a specific time, but I can issue a storm warning...
1. A credit card recession
2. A student loan recession
3. An "auto-matic" recession
4. A retirement recession
5. A rampant recession
The truth is, I can predict what may cause the next recession. Regardless of what causes the next downturn, it will eventually happen.
My team from Debt.com caught up with a few financial experts at FinCon, a huge annual gathering of the nation’s foremost financial advisors, influencers, and members of the media. Here’s what they have to say about preparing your finances for the downturn now…
Chelsea Brennan, SmartMoneyMamas.com: So we’ve been talking about Recession 2019, 2018, 2016 – we’re always talking about it. Whether or not it actually comes I think the biggest thing for people who have investments is to do a gut check of if you woke up tomorrow and the market was down 20%, are you panicking?
And if you are, you probably need to reallocate, and now is the time to do something about it. If you’re feeling stuck in a debt and you’re wondering what do I do in a recession? What if I lose my job? I think now is the time to start bolstering that emergency fund. Start thinking about paying off the high-interest debt.
Lance Davis, Bankrate.com: Have a fully-funded emergency fund in a savings account that is paying a competitive APR. Make sure you have that so when times get tough, if you lose a job or your home you can’t meet the mortgage payments or anything like that you have the emergency fund to at least you know act as a buffer while you’re trying to connect the dots elsewhere.
Um, so I think that’s the foundation to a sound financial plan is having that emergency fund to fall back on.
Lauren Jackson, Self.inc: Trying to make sure your credit is in shape so that if you do need to borrow money next year to get you through the recession you can get those good interest rates. You can get those better quality credit products you might need to kinda get yourself over the hump.
Leslie H. Tayne, Esq., Tayne Law Group: Every single day you need to be doing something for your personal finances to allow yourself every opportunity to get through what can be thrown at your way.
From illnesses to loss of income, to changes in the law, to interest rates changing – whatever comes your way by doing something today positive for yourself whether that’s putting money away, looking at your credit score, managing your debt properly, talking to your family members about budgeting and your significant other – every single day will help you in the future.
Doug Nordman, The-Military-Guide.com: Set an allocation you can live. And it’s got to be one that your comfortable with. Not just financially logical and cold-hearted mathematics. But also one that you can sleep well at night with. Once you set that asset allocation – it’s even better if it’s written down why you have that asset allocation and you’re going to do it – once the recession hits, you can say to yourself, “it’s okay, I’ve got a plan, I’ve got an asset allocation. I’ll just keep investing and stay the course.
Published by Debt.com, LLC