Will You Survive a Recession?

The word is that we are heading for a recession. Even those that insist that we are not headed for a recession seem to feel that a dramatic slowdown in the economy is inevitable. And a recession can mean trouble for your personal finances, and for your job. But there are some things you can do now to prepare yourself for a recession.

Getting your personal finances ready for a recession

1. Pay down debt. If you can manage it, pay down debt. In a recession, you want to have as little debt as possible. Aggressive debt reduction can be a great way to pay down a great deal of debt in a short time. During an economic slowdown, it is important to be as financially stable as possible, and having a lot of debt is a hindrance to stability.

2. Set money aside. If you already have an emergency fund, consider setting more money aside if you can. Cut back on unnecessary expenditures in order to put more money in an emergency fund. Build up gradually now, and especially when you are doing very well, and it will be there later.

3. Thing long-term investments. Many people are tempted to completely bail on the stock market right now. That may not be the best plan. Instead, look for companies with good fundamentals. Many blue-chip companies are solid and likely to recover. These returns aren't "sexy," but they are usually solid. You have to think long-term and realize that you won't make any money now in the stock market. But with careful investing, you can "buy low" now and "sell high" later.

4. Consider consulting a financial planner. You don't have to do it alone. Look for a fee-based (not a commission based) financial planner to help you sort things out. A couple hundred dollars now can help you get on track for a much brighter future -- and help you prepare your personal finances for a recession.

Keeping your job during a recession

It is important to take steps to keep your job during an economic slowdown. So, forget about the raise and consider what you can do to prove your worth at work.

1. Become more visible in a good way. You want to be recognized for good efforts, especially now. Your bosses need to know who you are, and why you are valuable. Go beyond, volunteering for extra work (but make sure it is work you can handle and do a good job with). Make solid contributions and politely make sure your boss notices what you are doing for the company.

2. Suggest cost-cutting measures. Use your creativity to come up with practical ways to cut costs and/or increase efficiency at work. You can also look for viable revenue streams that cost little to nothing to get started. Now is definitely not the time for grand schemes or asking for a raise. It is time to show your resourcefulness and adaptability.

3. Boost your skills. Take a training class or seminar (on your own time if it is not offered at work) to improve your skills. You want to stay up-to-date with what's happening in your field. You also want to remain relevant. Make sure that you have the necessary skills to do your job well.

4. Have a good attitude. Even though times are tough, you should refrain from grumbling about it. Morale-killers are often let go long before those with good attitudes. Offer constructive ideas for improvement, but don't whine and complain.