Hello everyone, this is Roger Brooks at Strategic Investment Management.
Recession talk is everywhere. But what if I told you there are smart moves you can make right now to protect your finances, even if the market goes south? Let’s talk about how to recession-proof your financial plan.
First, build or beef up your emergency fund. Ideally, you want 3 to 6 months of expenses set aside. Why? Because in a downturn, that cash cushion can keep you from tapping into your retirement accounts or racking up debt. It’s your first line of defense against a recession.
Next, diversify your income. If all your money comes from one job or one source, you're more vulnerable to the negative impacts of recession. Think about starting side gigs, freelance work, or even investing in passive income sources. And if you’re a business owner, now’s the time to build recurring revenue you can count on.
Once you figure out your income, it’s time to review and rebalance your portfolio. Rebalancing helps you stay aligned with your goals without overreacting to headlines. A recession is the worst time for emotional investing.
Now is also the time to cut non-essential expenses. Don’t wait for an emergency to get lean. Start cutting while it’s still a choice, not a necessity. Redirect those savings into your emergency fund or pay down high-interest debt.
Finally, stay invested. Yes, the market may dip. But pulling out of stocks in a recession could mean missing the eventual rebound. If you’re investing strategically, downturns can actually present an opportunity.
If you're unsure about your next move or feeling anxious about all of the recession talk, don’t guess — get guidance. Meet with us here at Strategic Investment Management to recession-proof your plan with a professional. We look forward to meeting with you!