There has been a lot of talk recently that we are moving towards a recession.
The definition of recession is when the Gross Domestic Product declines for two or more consecutive quarters, but how does this really affect you? In reality, it is a period of economic slowdown that is marked with companies earning less, paying less, and generally things in life are a little less prosperous.
So, what should you do to prepare yourself if a recession, specifically a prolonged one should hit? It is actually quite simple, the biggest fear that you have and the biggest thing you should prepare for is the possibility that you could lose your job. In a recession, companies are often known to scale back operations, as sales slow down and when that happens employees are often one of the things to hit the chopping block. In the event of this occurring, you need to keep your ear to the ground and make sure that in the event that you are let go, you don't only find out about it when the boss calls you into his office to deliver the bad news.
The next part of the preparation is to cut back on your spending and boost your emergency fund. If you don't have one, then start one immediately. Preparing for the worst is always a good idea even if it never happens.
How can you put money into your emergency fund?
If you are making large repayments on your car, consider downsizing your car and buy something smaller with less repayment. Ultimately you need to reduce your spending to top up that emergency fund. Whether or not a recession occurs, having a nice large emergency fund is certainly something valuable in any economic situation.