Even if the economy avoids a recession in 2023, there are actions you can take to ensure financial stability no matter the turns the economy makes.
There are many things in life worth being prepared for, as the Boy Scout motto says, and a recession is one of them.
See Indy's biggest moments of 2022 through the eyes of award-winning photojournalistsIn the short term, finance expert and professor of practice at Indiana University Bloomington Gregory Renn said to live within your means, avoid going into debt and save wherever possible. Having cash-flow flexibility is essential, because it means that you can more quickly access funds for essentials when the economy takes a downward turn.
"That should be more of a parachute option rather than a first choice because there's some costs," Renn said.This should be three to six months of all expenses — three if you have two sources of income, six if you have one. Eventually, building up to 12 months that would cover expenses is the goal, Renn said.
"Lower your expectations of what you can purchase," he said."So try to delay big purchases during the recession or what kind of return you can make on your investments during a recession."During tough times, it’s important to have people in your corner to rely on. But during a recession, that support can sometimes be financial, in addition to love and care from family and friends.
A recession would also mean price reductions and an end to the historic inflation that has tightened the budgets of Americans for months."Investing in yourself during a recession is a really good time to do it," he said."because the benefits of staying in the labor force are so much smaller at a time when wages aren't high, and when there's not as many good job opportunities.
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