If you’ve been keeping up with the business news lately, then you are aware that there’s been a lot of discussion about the next recession. Few who experienced the 2008 downturn were left untouched in some way, even if they held onto their jobs. Many people’s pensions were wiped out, investments were in tatters and even real estate, which has often been thought of as the safe investment, imploded.
The best time to prepare for another recession, which is inevitable, is by getting ready for it in advance. Some economists are suggesting the next one, which is generally believed to occur within the next 18 months to 2 years, will be much worse than the 2008 recession. Whether it is worse or not is beside the point. No matter what, you should begin to prepare for it now. The following are 5 of the top things you should be doing to get yourself ready for the next recession.
- Bolster savings: The very first thing you need to do is to make sure you are saving as much as possible. This would be the time to stash away any bonuses or extra funds that you have available. The general rule is to have six months of living expenses if you had no income, but I know of people who have at least one year’s worth of savings to be able to live if they were to lose all of their income. If you happen to be an older worker, such as Generation X or a Boomer, it is suggested you stash as much into savings as possible. We know that during the last recession older workers were hit the hardest regarding finding jobs that paid what they earned before the recession. Worse, many went a year or two without finding any employment.
- Decrease debt: The other top activity you should do is to make sure you’ve paid down debt, such as credit cards, as much as possible. You never want to live beyond your means, and if you’ve been doing it, this is the time to get things straight. Consider downsizing your high mortgage or rent. If you have a fancy car and it’s taking a high percentage of your income, you should seek a trade-in that is more aligned with your earnings. One of the best things you can do to keep yourself in check and get a plan together if you have too much debt or don’t know where to begin is to meet with a credit counselor who will help you determine a date and payment plan for getting rid of the debt albatross. If you need more money to pad your savings or decrease debt, getting a side hustle nights or weekends could help.
- Look at your employment: Once you’ve addressed the two previous points, the next thing to do is to look at your job. You may love what you do, or you may hate it. Either way, what you have to do is take a critical eye and no matter the situation be prepared to get laid off. No one is indispensable, and remember, that during a recession, even if an employer thinks you’re awesome, he will be looking to keep his business from imploding and one of the first places he will look to cut costs is with employees. Make sure, now, that your resume is up to date and ready to go at a moment’s notice. Also, get your LinkedIn profile updated and ask for new recommendations from people to help increase your employability.
- Network, network, network: This is the time to warm up your old connections and get new ones. Nurture your business relationships now, so you don’t end up in a situation where you’re calling up people when you’re desperate. Set a goal for yourself, such as attending one monthly business networking event, and each week make it a point to keep an old business relationship warm and nurture a new one. An excellent way to keep relationships strong is to think about what you can do for others and become a valuable resource to them. Also, as you build relationships, look to meet people at higher levels of the corporate ladder than where you are since they could be the decision makers if the time should ever come that you are turning to them for a new job.
- Career training or retraining: Training, retraining or adding a credential is also one of the most important things you should consider to increase your employability. This is the time to get any additional credentials in your industry or to get retraining if you’ve wanted to move into another industry or grow within your field. Remember, when the next recession comes, even if you want to remain in your company or current sector, having additional credentials and the ability to shift into other roles and positions, may very well be what keeps you employed and saved from being laid off.
There are several other things that you can also do to ensure that you’re in reasonable shape for the next recession, such as taking a look at your investments and making sure your credit score is high. However, accept the fact that the next recession is already on the horizon. Get yourself prepared and ready so that when it does arrive, you’re not in a situation that will devastate your family. Just getting ready and prepared is one of the best things you can do.
Author of “Not Your Father’s Charity: Grip & Rip Leadership for Social Impact”(Free Digital Download)
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