9 Ways You Can Recession-Proof Your Life

If a recession hit tomorrow and you lost your job, would you have the means to live? Would you be able to pay your mortgage or rent? Could you continue to pay your bills on time without having to go into debt?

For many people, the answer is no.

Recessions can happen at any time. If you don’t prepare, you could find yourself in jeopardy of losing your home or having to drain your savings.

But there are some things you can do to prevent that from happening. If you want to prepare for when the next recession hits, here are nine ways you can recession-proof your life.


1. Live Within Your Means

Having debt is never a good thing, but in a recession, it can destroy you. So it’s essential to live within your means at all times so that you don’t go into debt in the first place.

Only buy things you need that you can pay for with cash. Resist the urge to put vacations or frivolous purchases on credit cards. As a general rule, you should only pay for purchases with credit cards if you intend to pay the bill in full at the end of the month.


2. Create an Emergency Fund

It’s always a good idea to have some money saved for a rainy day, and a recession often feels like months of rainy days.

 Financial planners and experts recommend that you put about 10% of every paycheck into an emergency account. You should only touch that account if you lose your job or have to pay for unexpected bills or expenses.

 At the very minimum, save three to six months of expenses in your emergency fund. If you can save more, even better! With an emergency stash of cash, you’ll have some back-up funds that you can dip into without having to go into debt.


3. Have a Second Job (or a Fallback Career Plan)

No matter where you work, there’s always the possibility of your company going out of business, selling to another company, or merging (which can cause massive layoffs). If that happens during or because of a recession, it may be challenging to find a new job.

 But certain types of workers are always in need. 

Consider going back to school to learn one of these skills or shifting into one of these careers now in preparation for the next recession:

  • IT professionals
  • Utility workers
  • Accountants
  • Teachers
  • Writers
  • Auto mechanics
  • Delivery drivers
  • Lawyers and legal professionals

 No matter how tough times may be, professionals in these lines of work tend to fare well even when other people are struggling.


4. Keep Your Credit Score High

Should you find yourself in a bad financial situation, it may force you to borrow money to cover your monthly expenses. And the only way a lender will extend you a loan is if you have a good credit score.

According to Equifax, a “good” credit score falls between 670 and 739 points. If your score is lower than 670, it’s time to work on building it up.

You can increase your credit score by paying all your existing bills and loans on time. You can also boost your score by having open lines of credit with unused, available funds.


5. Look For a Better Job Today

Is your current job just not paying you enough to cover your expenses and save funds for a rainy day? 

If so, it’s time to start looking for a better job that pays more.

The more money you make now, the more you’ll be able to save for your future. A salary increase may also provide you with the funds needed to start investing and planning for your retirement.  


6. Pay Down Your Debt

After you save for your emergency fund, start using any excess money you have to: 

  • Pay down your mortgage
  • Pay down loans
  • Pay off credit card bills

 Start by paying down your credit cards with high-interest rates or nearly maxed-out balances. And be sure that you’re never just paying the minimum owed on a bill. 

Paying more than your lender requires is the best way to see those account balances drop!


7. Contribute to a Retirement Fund

If you aren’t already contributing to a retirement fund, you should start doing so right now. If you’re eligible to enroll in a 401k, do so. If your employer doesn’t offer any retirement benefits, open an IRA on your own and start saving what you can.

You never know when a recession may hit. Say it happens in your 50s. If you take a hard financial hit as you approach retirement, you may have to delay your retirement or continue working well into your 60’s or 70’s.


8. Make Long-Term Investments

Investing is the key to building a safety net for your future, and investments in the stock market are the easiest and most advantageous to make.

Investing in stocks always comes with a risk, but the longer you invest in the market, the more likely you are to see gains.

 Consult with a financial advisor, invest on your own with an online trading account, or put your money into a mutual fund where experts will pick and choose stock investments for you.


9. Diversify Your Investments

No matter how much or how little you have, you should never put all your money into one type of investment. Diversify your investment portfolio by putting money into a mix of stocks, bonds, money market accounts, and real estate.

 Bonds and money market accounts are safer investments that can help offset losses you may incur from the stock market. 

The younger you are, the more you can afford to take bigger risks on stocks. But, as you near retirement, it’s wise to start shifting more funds into safer accounts that won’t result in net losses.



Living through a recession can be scary, especially if you don’t have money saved or are at risk of losing your job.

 You can start preparing for that unexpected future if you:

  • Live within your means
  • Save money in an emergency fund
  • Work in a recession-proof career
  • Maintain a good credit score
  • Get a new job that pays more
  • Pay down your debt
  • Contribute to a retirement account
  • Make smart investments
  • Diversify those investments


Put a financial plan into action today. No matter how old you are or how much money you make, now is the time to start planning for your future! 

Author Bio:

Ryan Sundling is a Group Marketing Manager at Cardinal Group Management. He has over ten years of experience in the conventional housing industry and works with Alexan on 20th Street Station on a daily basis to help them with their marketing efforts.