Finances can be a difficult or scary topic regardless of what is happening with the economy. But in a recession, it can be especially unnerving. Planning for the future is always a good idea, and speaking with a financial advisor about your individual situation is always a good option as well. Even though finances are very individual, there are some general things that can be done to help recession-proof your finances. An article in CNBC features advice from a wealth-building expert on how to do just that.
Diversify Your Income Sources: Whether you work full or part-time, or are retired, having more than one income source is a great strategy. For example, if you work in one industry, make sure your side hustle or part-time gig is in a separate industry. Another example could be if you are retired and collect social security benefits, you might consider a part-time job to earn extra income.
Live Within Your Means: A great way to measure living within your means is to save at least 20% of your income and put it into savings and investments. Think of it as investing in yourself first. This will allow you to build a cushion to use in the event that you have an unexpected expense or the economy declines. If you are struggling to save 20%, it is important to either reduce expenses or increase your income.
Like stated above, every person's financial situation is different. Don't be afraid to think outside the box to meet your financial goals and prepare for your future. In addition, don't be afraid to talk to a financial advisor, friend, or family member you trust to find a strategy and plan that works best for you.