January 9, 2023
A recession is coming so that is not the question. The question is are you ready for it? As you well know I speak all over the world. When you see me speaking in front of students I am preparing them for a financial future where they don’t worry about recessions because their money is […]
A recession is coming so that is not the question. The question is are you ready for it? As you well know I speak all over the world. When you see me speaking in front of students I am preparing them for a financial future where they don’t worry about recessions because their money is stable. So that they are in a place where their money is growing and when a recession hits they can take advantage of the world being on sale.
There is no question that the students I speak in front of will be prepared for every recession that comes in their lives when they reach adulthood. BUT, what about you? You reading this post that is already in adulthood and may have dealt with the 2008 Great Recession, are you ready for the next one?
Can you answer “YES” to these questions?
1. I have six months of expenses saved
2. I have no credit card debt
3. I am completely debt free
You are probably wondering why do I need to answer “YES” to any of these questions, let alone all three. It is because those you are able to answer “YES” to all three have the best chance of taking advantage of the recession instead of the recession taking advantage of them.
1. Why should you have six months of expenses saved before the recession comes? It is because during any recession jobs will be lost. May be thousands of jobs. May be millions of jobs eliminated. If you work for someone else there is a chance that you could be laid off. I know the threat of this possibility very well since it happened to me last recession. If you have six months of expenses saved then you are in a better position to weather the storm of a recession that may lead to a layoff.
2. Having credit card debt in your life is a definite threat during a recession. Credit card companies and banks get real serious about the money you owe them during recessions. They have bills to pay too and so they can’t have their “customers” not paying them. During recession there is an uptick in collection notices and annoying phone calls from creditors. They can sue you, most likely win, and get their money from you. If you have credit card debt as you read this then make the ultimate effort to pay it off before the recession hits.
3. I understand that being completely debt free can be a challenge. Especially if the recession lands next year. The key to this goal is to get laser focused on paying your current debt down. This does not mean your mortgage if you have one. This means all other debt. Student loan debt, furniture debt, medical debt, personal loans, car debt, etc. Any debt that can be paid down should be paid down.
Imagine going into the next recession without a car note, credit card payment, or a student loan payment. Imagine not paying someone else hundreds of dollars each month, but instead putting that money in a savings account so that you are prepared for the down turn.
It is up to you to prepare for the future that is coming our way. Those with money saved and the least amount of debt are going to be the ones in the best position to win. During the “Great Recession” people were just trying to survive. Make sure this time you are thriving!
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