Is A Recession Coming? 8 Money Transfers You Can Earn Right Now


Many US economists and financial experts expect a recession, which is typically characterized by a second straight quarter of a significant slowdown in economic activity.

Previous recessions have seen massive layoffs, higher borrowing costs and turbulent stock markets.

Focus on what you can control, gather facts, and take steps to protect your money. Above all else, it is important to remain calm.

With the talk of an upcoming recession, many wonder if we’ll be heading into a recession in 2022. Perhaps the best answer is in the words of psychology author Morgan Housel, who tweeted in April: recession. The timing, location, duration, scale and policy response are only uncertain.”

The point he is making is that there is always a recession coming and the economy is cyclical with ups and downs. We can’t say exactly what’s going on in between. I can’t help but look back. Since the Great Depression, the United States has experienced about a dozen recessions that lasted from several months to more than a year.

Figuring out the details of the spare is a guessing game. Anyone who speaks the other way will try to sell something.

The best we can do right now is to rely on history to build context, be more proactive about the movement of money over our control, and curb our urge to panic. This includes reviewing what happened in previous recessions and scrutinizing our financial targets to see what impact we can use to keep things on track.

Here are eight specific steps you can take to strengthen your financial stability and resilience in a turbulent economy.

1. Plan more and be less flustered

The bright side of the current recession forecast is that it’s still just a forecast. There is time to plan without the real stress and difficulties of a recession. Review your financial plans for the coming months and identify worst-case scenarios where your adrenaline isn’t high.

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A few questions to keep in mind: If you lose your job at the end of this year or early 2023, what are your plans? How can you boost your funds now to circumvent layoffs? (Continue reading related tips.)

2. Accumulate a cash reserve

The key to getting out of a recession relatively unscathed is to have cash in your bank. We learned that during the Great Depression in 2009, unemployment reached 10%. On average, it took the affected people 8-9 months to land. Those lucky enough to have a solid contingency account have been able to keep paying for their homes with minimal stress and give them time to figure out what’s next.

Consider rearranging your budget to allocate more savings now to approach a six to nine month rainy day reserve. Separating recurring subscriptions may make sense, but a better strategy that doesn’t feel deprived might be to contact the claimant (from power companies to auto insurance) and ask for discounts and promotions. Speak specifically with your customer retention department to see what suggestions they can offer to avoid plan cancellations.

3. Find a second source of income

Web searches for “side hustle” have always been popular, especially now as many people are trying to diversify their sources of income to prepare for a possible recession. Just as it helps you diversify your investments, diversifying your income sources can help reduce the volatility of your earnings following unemployment. Check out my recent story for inspiration on an easy and up-and-coming side job you can do at home.

4. Resist impulsive investment moves

It’s hard not to worry about your portfolio after the recent red arrow in the stock market. With more than 10 or 15 years left until retirement, history proves that it’s best to continue the ups and downs of the market. According to Fidelity, during the 2008-2009 financial crisis, those who continued to invest in target-date funds, which generally include retirement-related mutual funds and ETFs, had higher account balances through 2011 than those who reduced or stopped giving, according to Fidelity.

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If you have not yet applied for automatic rebalancing, be sure to consult with your portfolio manager or online broker. This feature allows you to ensure that your instruments remain appropriately weighted and aligned with your risk tolerance and investment objectives despite market fluctuations.

5. Lock Interest Rate Now

Interest rates will rise as policymakers raise interest rates to lower inflation levels. This can be bad news for anyone with an adjustable rate loan. It’s a difficult problem even for those with credit card balances.

While borrowers of federal student loans don’t have to worry about rate hikes, those with private variable rate loans can take advantage of consolidation or refinancing options through existing lenders or other banks such as SoFi, which can consolidate debt into one fixed rate loan. can be considered. . . . This will prevent unexpected increases in your monthly payments when the Fed raises rates again this year as expected.

6. Protect your credit score

Borrowers may struggle to gain credit during recessions as interest rates soar and banks impose stricter lending rules. Aim for a high credit score of 700 or higher to get the best loan terms and interest rates. You can usually check your credit score for free at your current bank or lender, and at you can also get free weekly credit reports from the three major credit bureaus through the end of the year.

To improve your credit score, work on paying high balances, review and challenge any errors you may have on your credit report, or transfer your higher interest rate credit card debt to a lower interest rate debt consolidation loan or referral 0% balance transfer card APR Consider incorporating it into

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7. Press Pause When Buying a House

It is already a highly competitive housing market with few houses. If higher mortgage interest rates are putting more pressure on your ability to buy a home within your budget, consider renting a little longer. If you’re also concerned about job security against a possible recession, there are more reasons to stop. Renting isn’t cheap right now, but it could offer more flexibility and mobility. Without having to prepare cash for down payment and closing costs, rentals can also potentially provide more cash in difficult economic times.

8. Valuables management

The advice from the high inflation era of the late 1970s is still valid today: ‘If it doesn’t work, don’t fix it’.

As supply chain challenges persist, many of us face price increases and delays in purchasing new cars, tech products, furniture, household items, and even contact lenses. This also includes spare parts. If your product comes with a free warranty, be sure to sign up for it. And if insurance extensions are a nominal fee, it may be worth it in times of skyrocketing prices.

For example, my car has been in the repair shop for over 3 months and is waiting for parts to arrive from abroad. That’s why you pay rent in addition to your monthly car insurance premium. If nothing else I’d be heading towards a potential slump, a more cautious driver.

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