Resist the panic trap that can come with recessions.
Economic expansions never last forever. Eventually, they’ll be followed by a recession. It’s inevitable. And it’s a natural part of the economic cycle. While we never know when the next recession will hit—or how long it’ll last—history shows that, on average, recessions don’t typically last as long as booms.
We also know that, no matter when they hit, recessions will stir up anxiety and fear. And that’ll trigger panic and rash decisions, which can lead to big losses.
So, resist the panic trap that can come with recessions.
If you can keep a level head, and follow these six steps, you’ll be empowered to weather any recession—and any personal financial hardships you may face outside of recessions.
6 steps to weather any recession
1. Don’t Make Drastic Changes To Your Investments
People tend to make bad investing decisions when they get stressed. Don’t time the market or take big risks. Make your plan with a professional’s help and then stick to it. Also keep a lookout for opportunity amid the fallout. Market volatility can create unique opportunities in even the worst recessions.
2. Expect Emotional Ups & Downs
When recessions hit, it’s normal to get worried about your money, your work, and your loved ones. But don’t let that worry take over and cause panic. People who let fear guide their financial choices often end up getting the most hurt during recessions.
3. Take Care Of Yourself & Your Loved Ones
Recessions can bring layoffs and stress to yourself and your family and friends. Tough times are when it’s important to fall back on your values, communicate, and take care of the people who matter most. Sometimes, the hardest part is explaining recessions to children who worry or helping the folks who are worse off than you.
4. Ignore The Entertainers
You know what gets ratings? Headlines that scare people. And there’s no shortage of those during recessions. Don’t listen to pundits who act like they know what’s going on but really don’t. They aren’t experts, and scary headlines will just make you stress. So, tune them out.
5. Stay Flexible
No one can tell exactly what a recession will bring until it happens. Be prepared to cut back on your expenses. And know where you can turn for financial backup just in case. If you have a recession income plan, you can potentially avoid the financial hit of liquidating assets during a downturn. (I can help you create one if you’d like to discuss).
6. Get Professional Advice
You don’t have to go it alone. The calm opinion of a pro can be the antidote to the chaos and anxiety that come with recessions. I can help you steer clear of hasty choices so you can stay focused on your long-term goals.
The Bottom Line
Making a plan in advance and sticking to it is one of the best things you can do to keep yourself on track when the tough times hit.
Remember, recessions are normal.
But the truth is you can take action to weather the fallout—and with the right strategies, you can do more than simply survive. You’ll have the tools to thrive during any recession.
