Recession

As the nation focuses on the upcoming elections, I wonder if anyone has been following the bigger story: that the US has an estimated 50+% chance of going into recession in the next six months. Millennials don’t seem to notice, don’t seem to be worried, or maybe think there’s nothing they can do either way. The dangers of an economic recession are very real though, and millennials should be preparing themselves for whatever the outcome. Here are nine things you should be doing right now to recession-proof your life:

Prime Your Network

If the economy does take a turn for the worst, your network will be your greatest asset.  But a network is no good if you are asking for favors out of thin air, so take the time now to reestablish relationships with colleagues and friends you haven’t spoken to in awhile.  Write an email to your previous bosses and coworkers to let them know how you’re doing.  Ask a friend in your industry to lunch.  Remember, you aren’t looking for a job now, so be casual and genuine in your contacts.

Apply to Part-Time Grad School Programs

You’ve been thinking about going back for awhile and graduate school can be a great place to hide out during a recession, as long as the program helps you reach your goals.  Don’t abandon your job yet; just consider applying to a part-time program where you could take evening classes after work.  This gives you a backup plan in case of job loss, a financial backup plan in the form of student loans, a vehicle to get a new job if necessary, and by applying now you will beat the rush of recession candidates and increase your chances of admission.

Pay Off Bad Debts

The last thing you need during an economic recession is bad debt in the form of high-interest credit cards.  Take the time now to stop accumulating bad debt and possibly pay off a little extra each month by forgoing entertainment activities, such as movies with friends, dinners at restaurants, or drinks at the local bar.

Invest in Your Career

It looks like many of us will probably be getting an extra $600 back with our tax return this year thanks to the White House. Whether that return will come in time to halt an economic recession remains to be seen, but either way it’s important we take the money and spend it to stimulate the economy.  Take the $600 dollars and spend it on your career or personal development – that way, you are benefiting the US economy and bettering your job situation.

Build Long-Term Wealth 

There are some benefits for millennials in an economic recession, provided you keep a steady income.  This is the best time to invest your money in your 401K plan because stock prices will be low, you’ll get more for your money, and you have about 30-40 years of investing time.  You could make huge returns, as long as you choose stable stocks from commodity companies who have been in business for a long time (I own this book, it’s good).  There’s also the opportunity to build equity in real estate because interest rates will drop to their lowest in the months leading up to a recession.  If you are thinking about buying a house, now is the time. 

Refinance Your Mortgage

If you currently own property, lower interest rates can help you too, as long as you aren’t selling.  Consider refinancing to get a lower interest rate on your mortgage.  Interest rates will continue to drop until an economic recession sets in, then will go back up again.  If rates have dropped enough to where you come out ahead after refinancing, take the plunge.

Start a Side Business

You never know what could happen, so to bulk up your emergency savings, try your hand at a part-time money-earning project.  With Web 2.0, there are numerous ways to start a part-time business at hardly any cost – the trick is to choose an industry that can make money in an economic recession.  With a weaker US dollar, we could see growth in the US tourism industry, so a blog or website for visitors travelling to your area would make sense.  Also, consider how you could start a business that caters or exports to foreigners in countries less likely to be affected by the US economy.  There’s even room for blogs and consulting services about finances, investing, or anything else people might want to learn more about in times of hardship. 

Make Small Lifestyle Changes

The price of gas and energies will rise in an economic recession, so one way to save money is by considering alternate forms of transportation.  Can you ride your bike to work in the summer?  Is there a bus or train you could take instead of driving?   Another thing to change is eating habits – you can save money by not eating out as much.  Why not learn to cook some of your favorite dishes from your regular restaurant spots?  I’m sure there are plenty of other ways to save money by changing your lifestyle, so feel free to leave your own ideas in the comments section.

Remember What Makes You Happy

To me, this might be the most important – remember what makes you happy.  You might lose some of the things you love, but you will always have your relationships with people.

Of course, there’s no way to truly recession-proof your life, but I believe some of these tips could help millennials get through their first economic recession as adults.  What do you think will happen to the US economy?  Feel free to leave your thoughts in the comments section!

Further Reading:

• Prepare For Economic Recession as a Business Owner
• Maybe There Will Be A Recession.  Here’s What To Do Just In Case
• Surviving the 2008 Recession
• What Does an Economic Recession Mean To You? (Another Millennial’s Take)