15 Crucial Tips to Get Through the Next Recession

IMPROVE OR PRESERVE YOUR CREDIT SCORE

When you’re doing well financially, it can be tempting to let your attention to details, like making sure every bill gets paid on time, slip a little. Sure, nobody wants to pay a late fee. But if it doesn’t affect your overall lifestyle, you might not realize the harm it’s doing to your credit score.

A lower score can come back to bite you during a recession because you might not be able to get a loan you really need. Even during a recession, lenders are still making some loans, said Jeremy Shipp, managing partner of OWRS Firm, which provides wealth management and retirement planning services. But, “this all depends on your credit score, so make sure you are always maintaining great credit discipline,” he said.

REBALANCE YOUR PORTFOLIO TO REFLECT YOUR RISK TOLERANCE

The time to think about your risk tolerance is before a market crash hits, not after. For example, if you’re close to retirement and 90 percent of your portfolio is in stocks, consider reallocating a portion of your investments to fixed income because you don’t want to be forced to cash out when the market is at a low.

If the market crashes before you can rebalance, try to wait out the recession, if possible, said Stern. If you’re not sure how you should be managing your investments, consider finding a financial advisor.

EXERCISE CAUTION BEFORE BORROWING

Before you take out a loan during a recession, make sure you can really afford to make the payments, said Shipp.

“If you’re borrowing for an opportunity (buying a cheap asset), then you want to fully understand the asset you are buying and have a high degree of comfort and certainty that the opportunity will pay off,” he said.