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Why do we keep hearing about a recession? Is it happening?
Even economists can have a hard time accurately predicting the start of a recession: the 2020 recession wasn't even named as such until months after it started. All this uncertainty can definitely make it feel like a crisis is looming, and can make it feel hard to predict "what's next" for our finances.
High inflation and the bear market have signified the start of recessions in the past, but the reality is that those events are stressful on their own, whether they are followed by a recession or not.
What does "recession-proofing" your finances even mean?
It means really focusing on what we work with our Bolder Members to accomplish year round, every year, because we get to do really awesome things with our money when we feel secure about it. And, of course, it feels great to be prepared for unfavorable circumstances, like a recession.
Most Americans wait until some sort of crisis to react to their money, so that's why the economic news can feel particularly scary right now. If that's you, we're proud of you for reading this article! Now let's get to work.
Recession or not, here are some ways to find financial security right now:
1. Spend with intention
Find out exactly where your money is going every paycheck, and reflect on how that's working for you. Is your spending supporting a feeling of financial security, or are other emotions or impulses driving? Now is the time to really get in control of where your money is going, and be honest with yourself about what you can and cannot live without.
2. Boost your savings
By spending more intentionally, you will find money. Put that money into savings, so that you feel secure if something were to happen, like you lose your job or are hit with an unexpected cost. There are two accounts for you to build:
i. Rainy Day Fund in a basic savings account that you can use in case of a car repair or small, immediate financial hit. Starter goal is $1,000, and ultimate goal is 1 month of expenses.
ii. Emergency Fund in a high yield savings account that you can use if you lose your job or some of your income. Starter goal is $10,000, and ultimate goal is 3 months of earnings.
Remember, wherever you start from when it comes to financial health is the best place for you to begin! No shame, just take small steps until you can build up to where you feel secure. Need to find more money? Now is a great time to...
3. Earn more money
Let's put your skills to good use, sell some things that you are no longer using, or take up a part time job like Amazon Flex, Uber, or remote work. There’s no shame in however you earn money to set it aside for your financial health. Just remember that this money isn't meant to increase your expenses (we call that lifestyle creep), it's meant to alleviate any financial stress and improve financial security. Give it a job, like savings or paying off high interest debt!
4. Work on your money mindset
Especially now, you may be tempted to make decisions out of fear, and we don’t want you to get into debt because you’re afraid of using your paycheck for groceries, or panic sell because the market has dropped.
We want you to keep chugging along, taking control of your life, and feeling confident about what you are doing and what you are capable of. Reflect on your past experiences with money, and what you think and feel about money today because of those events. If you don't love the relationship you have with money, you get to shift it!
5. Get a community of support
We learned in the pandemic that connection is critical to feeling ok when everything around us seems not ok. Now is the time to join a community that’s focusing on financial health, so you don’t have to work on all of this alone.
That's us! 👋🏽 In the Bolder Money Community, we help you connect all your accounts in one place, and track your spending, so we can get personalized recommendations on how to alleviate financial stress, find financial security, and get what you want with your money. Text us at (347) 418-0923 to learn more!
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