7 Tips to Survive a Recession


As costs of living keep going up, and recession woes are impending, it’s no wonder everyone is pinching pennies to save for a rainy day. 

This post explores 7 tips to help you weather through a recession. 

This article was submitted by a Guest Contributor. The opinions expressed in this publication are those of the Guest Contributor.

1. How much cash do you need?

According to this CNBC article,

  • Dual-income families: 3 months’ worth of expenses

  • Single earners: 6 months or more

  • Entrepreneurs: 1 year of expenses

  • Retirees: Reserve 1-3 years of expenses in cash

Of course, these are just general guidelines.

You will need to adjust based on your own circumstances. 

Recession also spells opportunity, this may be time to hold extra cash, so you are ready to deploy into the markets as opportunity rises. 

2. Re-evaluate your portfolio 

Look at your portfolio, is it time to rotate out of certain stocks?

Are you comfortable holding the stocks you have for the long-term?

3. Don’t try to time the market

Experts often caution against timing the market.

Some people will be comfortable with lump sum investing, while others prefer consistent DCA. 

You don’t need to go all-in during a downturn, and neither should you be too scared and stay on the sidelines too long.

You have to find your own balance.

Just know that nobody gets it right all the time, and you just need to be consistent in deploying your funds strategically. 

4. Get rid of high interest debt

In a recession, it is time to protect your funds.

High interest “bad debt” like credit card debt should be the first to go.

Try Dave Ramsay’s snowball method:

Step 1: List your debts from smallest to largest regardless of interest rate.

Step 2: Make minimum payments on all your debts except the smallest.

Step 3: Pay as much as possible on your smallest debt.

Step 4: Repeat until each debt is paid in full.

According to Dave Ramsay, the debt snowball works because it’s all about changing your behavior.

When you see your snowball actually working, you’ll be more likely to stick to it. 

5. Reduce expenses

Track your expenses for a month and you will get a clear picture of how you can reduce your expenses.

Everyone spends money differently – and have different priorities.

Your $5 latte may be critical to your mental health – so go get it (or maybe try making coffee at home?). 

As long as you are mindful about your spending, and where your money goes, it is money well spent. 

6. Diversify income sources

A recession usually brings about some job security fears.

Depending on your industry, a recession can either increase or decrease job security.

For most industries, it may be time to lay low and focus on doing your job well.

Regardless, it is good to also look into diversifying your income sources.

The key is planning ahead.

  • You have a solid dividend stream right now, but what happens when the companies cut dividends?
  • You have a rental property but can you find a new tenant when the lease ends?
  • You have side hustles but will they continue to generate consistent income?

7. Lock in interest rates

Another important aspect of surviving a recession is locking in interest rates. 

This also includes basic things like utilities. 

Where possible, lock in interest rates favourable to you in the mid-term. 


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