Tags: money | moves | six | survive | recession

6 Money Moves to Make Now to Survive a Recession

6 Money Moves to Make Now to Survive a Recession
(Dreamstime.com)
 

Monday, 23 March 2020 09:32 AM

If you don’t already have a strategy in place to protect your finances, get started now.

“Reacting in the middle of a recession is going to be too late,” Timothy Hewitt, a certified financial planner in West Conshohocken, Pa., told Consumer Reports.

Here are six steps that can help you ride out an economic slump.

  • Boost Your Emergency Savings: If you are worried that your job won’t last through the next downturn, aim to build cash reserves that can cover six to 12 months of costs. Look for high-yield online bank savings accounts that can help speed your savings. Along with a robust rainy day fund, consider opening a home equity line of credit, or HELOC, if you don't already have one.
  • Pay Off Credit Card Debt: Funnel as much as you can now into payments. For example, if you’re expecting a large tax refund this spring—the average last year was more than $2,800—consider earmarking some or all of it to shrink that balance.
  • Reduce Your Spending: Perhaps you can cut the cable cord or skip a vacation, or raise your home or auto insurance deductible. With these moves, you will get a better understanding of how much you really need to meet essential expenses, as well as free up cash for saving and debt reduction.
  • Upgrade Your Job Skills: Keep your skills and knowledge up to speed by taking advantage of every on-the-job training opportunity, says Catherine Collinson, president and CEO of Transamerica Center for Retirement Studies.
  • Take Advantage of Market Losses: In years when the taxable losses exceed your gains, you can deduct up to $3,000 of those losses against your ordinary income on your federal tax return. Any losses above that amount can be rolled over to offset gains in future years. Down markets are also a good time to consider converting pretax 401(k) or IRA assets to a Roth IRA, which allows your after-tax savings to grow tax-free.
  • Fine-Tune Your Portfolio: If you’ve kept your portfolio on autopilot for most of the past decade, it's time to take charge and review your asset allocation. If the markets do hit a prolonged decline, don't stop investing. The 2008 to 2009 meltdown helped unleash a record bull market, so even recessions can have a silver lining.

    For his part, President Trump began talking privately late last week about reopening the nation, despite the swiftly rising number of coronavirus cases and against the advice of health professionals, because he’s worried about the economic damage from an extended shutdown, according to people familiar with his thinking who talked to Bloomberg.

    He earlier retweeted several posts calling for healthy people to return to work after 15 days of precautions. “The fear of the virus cannot collapse our economy that President Trump has built up,” says a post retweeted by Trump. “Flatten the curve NOT the Economy,” another says.

© 2020 Newsmax Finance. All rights reserved.

   
1Like our page
2Share
Personal-Finance
If you don’t already have a strategy in place to protect your finances, get started now.
money, moves, six, survive, recession
479
2020-32-23
Monday, 23 March 2020 09:32 AM
Newsmax Media, Inc.
 

Newsmax, Moneynews, Newsmax Health, and Independent. American. are registered trademarks of Newsmax Media, Inc. Newsmax TV, and Newsmax World are trademarks of Newsmax Media, Inc.

NEWSMAX.COM
MONEYNEWS.COM
© Newsmax Media, Inc.
All Rights Reserved