7 Money Moves That’ll Protect You During the Next Recession

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Full disclosure, folks — I’m a worrier. What’s been keeping me up at night lately? Unchecked financial optimism. The Great Recession ended nine years ago and the bull market we’ve been enjoying since can’t go on forever. In fact, many economists think we’re overdue for significant contraction. If round two is even half as bad as round one, will you be ready? Here are seven money moves that’ll protect you during the next recession.

1. Bulk up your emergency fund

According to a 2012 Bureau of Labor Statistics report, the U.S. unemployment rate in 2008 reached 10 percent, and the long-term unemployment rate (defined as unemployment lasting 27 weeks or longer) hit 4.4 percent. If another recession caused a mass wave of unemployment, would you have enough cash on hand to weather months without a job? If not, now’s the time to bulk up your emergency fund. You should have a minimum six months' worth of income stashed away. (See also: 7 Easy Ways to Build an Emergency Fund From $0)

2. Pay off consumer debt

High-interest consumer debt only makes you more reliant on your job and less adaptable to changes in fortune. Use this relatively strong economic period to beat down debt. When the next recession hits, you’ll be glad you did. (See also: The Fastest Method to Eliminate Credit Card Debt)

3. Avoid new debt

If you’re trying to pay off debt, it probably doesn’t make sense to increase your debt load. To prevent a debt spiral, keep the credit cards on ice. And unless you plan on taking advantage of a 0% balance transfer offer, shred every new credit card application you receive. (See also: The Best 0% Balance Transfer Credit Cards)

4. Take aim at fixed expenses

When it comes to trimming budgets, variable expenses are usually the focus. But you shouldn't ignore fixed expenses, either — they aren't set in stone. If your car is older, consider switching to liability-only insurance. Try to negotiate a lower interest rate on credit card balances. Swap premium cable for a less expensive on-demand service. And if you’re not a heavy internet user, choose a cheaper data plan. (See also: The 6 Monthly Telecom Bills You Can Negotiate)

5. Learn new skills

Knowledge is always in demand. Practical skills like basic auto maintenance, carpentry, and gardening can save you money at home and generate extra income. A broader set of professional skills can make you more indispensable at work (and less likely to be laid off). Pursue both as part of your creative recession preparation. (See also: 8 Ways a Side Hustle Can Advance Your Career)

6. Update your resume

Your job is your primary source of revenue, right? Anything that keeps your career running smoothly helps keep your financial life on track, too. With an up-to-date resume, you can take advantage of new opportunities now and launch a job search quickly in the event of a sudden layoff.

Remember, use your resume to focus on measurable accomplishments (“managed a team that increased sales by 10 percent in six months”), include relevant titles and keywords to facilitate automated scanning, and proofread every word obsessively. (See also: 12 Words You Need to Delete From Your Resume Right Now)

7. Review your portfolio

Now is the perfect time to review your 401(k) and IRA investment choices. If you’re nearing retirement or simply feel your current risk level is too high, dial down your stock market exposure. And as long as you’re making a few tweaks, see if there’s room in your budget to bump up your contribution rate. (See also: 7 Retirement Planning Steps Late Starters Must Make)

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