Almost a decade has passed since the Great Recession, but several economists now say that the next one is already upon us. According to a surveyby the National Association for Business Economics (NABE), 45 economists agree that the U.S. is currently in a recession due to the restrictive economic activity brought on by the novel coronavirus shutdowns. 

However, it is not too late to prepare and stabilize your finances. These five simple steps will ensure that your finances are recession-proof.

1. Pay Down Your Debt

Getting rid of debt is a significant part of protecting yourself during the recession. Your first step should be to focus on paying any non-mortgage debts. This ensures optimal cash flow flexibility in the event of a drop in income.

2. Boost Your Emergency Savings

Recessions often result in job loss for a lot of people. Building an emergency fund will prepare workers for a potential loss of income. Be sure the emergency fund is enough to cover your living expenses for at least three to six months. This money can buy you time to search for your next source of income.

3. Develop Multiple Income Streams

Unemployment, furlough, or a salary reduction will cause you significant financial distress. By developing multiple sources of income from a second job or a profitable side-hustle, losing one job will not be as devastating a problem. Doing so will ensure that you have extra cash on hand during the good times and enough money in the event of a recession.

4. Live Within Your Means

Apart from the essential bills you pay each month, now is an excellent time to check how much you spend on "non-essential" items. Financial experts recommend spending less than 30% of your net income on non-essential goods and services. This way, you can have more money saved to weather a financial recession. Establishing a monthly budget is also a great way to guarantee that you are not overspending on luxury items or lifestyle expenses. If you do not have a budget, now is the time to create one.

5. Diversify Your Investment Portfolio

Never put anything in one basket — a common phrase looked over by most investors. If you have most of your money tied up in the stock market, an economic recession could spell financial disaster for you. To avoid this, you should rethink your investment portfolio. Make sure your investments reach out across different industries. When it comes to diversification, consider parking your money in various assets, such as:

· Residential or commercial real estate, or even vacant land
· International investments 
· Traditional stocks and bonds

Partner With a Professional

To completely recession-proof your life, partner with the financial pros at Progressive Debt Relief. We can help you settle, negotiate, and eliminate your debt. Please note that we do not offer money or loans. Our expertise lies in negotiating with your creditor or debt collector to arrive at better terms of payment.

A recession will not wreak havoc on your finances if you have the right mix of investments, low debt levels, and multiple sources of income. For help withstanding an economic downturn, contact Progressive Debt Relief today.