How to recession-proof your budget so that you’re ready for whatever lies ahead

The prices of gas, food and rent are rising. the Federal Reserve increased interest rates at the highest level since 2018. The US economy has shrunk for two straight quarters.

Economists are divided on whether a recession is coming, It is clear that economic uncertainty is not going to go away anytime soon. But there are steps you can take now to be prepared for what lies ahead.

Columbia University assistant professor Yiming Ma says it is not a question of when the recession will come. People should prepare but should not panic.

“Historically the economy has always been going up and down,” Ma said. “It’s something that just happens, it’s a little bit like catching a cold.”

But, she notes, some people’s immune systems are better at recovering than others. It is the same with finance. If you think a recession might destabilize you, here are some things you can do to prepare.

Know and budget your expenses

It’s important to know how much you spend each month. Ma recommends that you sit down and write down how much you spend from day to day. This will help you see what’s coming up, what’s happening, and what unnecessary expenses you can cut.

Money Smart of the Federal Deposit Insurance Corporation, a financial education, advises, “By understanding how much money you’re getting and what you’re spending, you may be able to make changes to help you through tough times. ” Program,

Budgets often reveal expenses that can be eliminated entirely or impulsive expenses that can be avoided by planning.

Free courses, like “Making One,” for guidance on budgeting budget (and sticking to it)” by CT Dollar and Sense, a partnership of Connecticut state agencies, and the budget of Nerd Wallet The calculator Might be a good place to start.

save as much as you can

The more non-essential expenses you can cut, the more you can save.

It’s not possible for everyone, but Jean Natalie, co-founder of Troutwood, an app that helps people make financial plans, says it’s time to budget for three to six months to meet basic needs. It is ideal to save enough for

programs like america saves The campaign, a nonprofit from the Consumer Federation of America, can help build the roadmap.

And if you have a savings account, it’s important to check if your bank gives you a good interest rate and buy one if it doesn’t, Colombia’s Ma said.

Her advice is to keep an eye on the monthly fees Or service charges that can eat into your savings. But don’t limit your options. Online banks sometimes offer better rates than traditional banks.

Consolidate Your Debts, Don’t Take Over

As interest rates rise, experts recommend that you consolidate your loans to a fixed-rate loan only and, if you can, pay off as much of your loan as possible.

“When job security gets worse when a recession hits, it’s not a good time to collect debt,” Ma said.

but paying your current loan of Where is easier. Federal Trade Commission Consumer Advice guide You may find it helpful to have a plan to get out of debt.

With high interest rates, this is also not a good time to take new loans big expenses like carAlthough experts recommend that if you need durable goods like a vacuum cleaner, stove or dishwasher, you buy them as soon as possible to avoid price increases in the future.

See Second-Hand Stores and Yard Sales

Alan Gallian, a home caregiver in California, has been hit by the rising prices of household items such as groceries, paper towels and gas for months.

His son’s favorite Hi-C orange-flavored drink, which was $1.99 for a six-pack, is now $2.50.

Since the start of the pandemic, when Gallian cut her health risks from caring for multiple families for the same client, her family has faced financial instability.

One choice she has made is to buy items such as clothing or electronics whenever possible, whether from Goodwill, pawn shops or Craigslist. But be careful when transacting with strangers through classified ads on Craigslist. safety tips Before using the online marketplace.

Negotiate your monthly bills

Since the pandemic, many companies have updated their relief policies and become more flexible with users, according to director Kia McCallister-Young. America saves,

McCallister-Young said that having providers of monthly services negotiate bills — whether it’s utilities, phone service, cable, Internet or auto insurance — can lead to meaningful savings. Individuals can ask for the best rate, any available discount, rebate or coupon that can reduce the monthly fee. He added that if a provider is competitive with other companies, there is an even better chance of getting a discount.

“If you tell them, ‘I’m looking to change,’ or you’re shopping, it helps — they’ll give you the best rate if they know you’re considering leaving, and Target Right now we have to get as much cash flow as possible,” she said.

Check out federal programs like Low Income Home Energy Assistance Program, that helps cover the bills, and life line, who can assist with the phone Bills, If you are not sure whether you qualify for a federal or state program, you can call 211Which will connect you to a local specialist who can assist you.

change your groceries

Grocery shopping with a meal plan, buying generic instead of brand-name products, or buying in bulk are just a few of these. recommendations From the Consumer Union of America.

“Many stores have price-matching, so if you show them that a competitor is selling the same product at a lower rate, they will match that,” McCallister-Young said. “You also want to look at the stores that are closest to you, so you’re not spending the extra money you’ll save on gas.”

An alternative way to save money on groceries is to check out food sharing apps, such as oleo, that connects people around their community to share additional grocery items, and more Good To go, Where customers can buy surplus food from businesses at a discount.

View Government Assistance Programs

Even with these savings and spending practices, a month’s wages are not always enough to cover significant expenses. If you have this situation, there are programs around the country to help you.

“Sometimes ‘end of the month’ just isn’t enough,” said Michael Best, an attorney at the National Consumer Law Center who works on financial services issues.

To access these resources, check if you qualify for Emergency Rental Assistance. Programnutritional support Programfarmers market nutrition Programor homeowners assistance Fund, These are federal programs coordinated by all state governments. Some states offer additional local programs for their residents.

Explore Community Support

If you’re experiencing food or housing insecurity, look for nonprofits or community organizations near you. from residence help And Meal to banks utility Help, non-profit organizations around the country can help. National organizations Like Feeding America hosts food banks in all 50 states.

“We are already seeing that the community is approaching us huge numbers Because of what is happening in the country in terms of economic stability,” said Kavita Mehra friend For South Asian Women, an organization that helps domestic violence Survive in New York City.

His organization provides housing, food and cash emergency assistance for people in the community. She said that between January and June, her group distributed more than $150,000 in emergency cash aid to survivors who were having a hard time keeping the lights on and food on the table. This is more than last year.

Food aid organizations such as Ample harvest cropshunger free America and food rescue US offers maps that allow users to find the nearest food bank by typing their zip code.

Get some exercise and take care of your mental health

Between worrying about bills and not knowing what your financial future might look like, your stress level can go through the roof.

“It’s a busy existence,” Gallion said. “You have to make a lot of arrangements for your mental health, and you have to keep a calm mind.”


Debra Kissan, clinical director of Light on Anxiety CBT Treatment hub, it recommends that you first recognize when your body is stressed. then she gives advice mindfulness exercises Like breathing in, touching a wall to calm yourself and fulfilling the “five senses for anxiety relief.”exercise,

short workout It is also known to improve both physical and mental health. Research by Iowa State University has also found that a little exercise can improve your mood providing short-term relief for people with depression.

Most health insurance covers some type of mental health support. If you don’t have health insurance, you can use Find. You can find sliding-scale therapists nationwide, and the Anxiety and Depression Association of America directory.

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