
The last 10 years have been a period of strong economic growth. We’ve enjoyed a profitable bull market, seeing average annual returns of more than 15% from the S&P 500. It’s been an enjoyable ride.
But history clearly demonstrates that while the market continues to rise over time, there are peaks and valleys along the way. Recessions are a normal occurrence. After 10 years of continually increasing returns, current economic models predict the chances of a looming recession have reached a statistically staggering 100%.
With a world-wide pandemic, the highest unemployment rates since the Great Depression and nation-wide unrest, a recession is overdue.
Exactly how a recession will impact individuals and families can vary widely. However, how you prepare for a recession does not. In this post I will review how I have prepared myself and my family for a deep and lasting recession, and how 13 other women in personal finance are doing the same.
Contents and Quick Links
- 1 How I personally prepared for a recession
- 2 How to Prepare for Recession, It’s Time for That Talk – Michelle is Money Hungry
- 3 Recession Proofing During Market Volatility – Money Mommy Mindy
- 4 What Investing Through the Great Recession Actually Looked Like – With Pictures – Military Dollar
- 5 10 Smart Money Moves You Can Make Right Now – Handful of Thoughts
- 6 Ways to Make More Room in Your Budget – Cooking Up FIRE
- 7 PrepperFI in the Face of COVID-19 – Tread Lightly Retire Early
- 8 Mitigating the Damage – A Dime Saved
- 9 Managing Your Money During a Recession – Learning to Live Light
- 10 Financial To-Do List While Social Distancing – Finance Over 50
- 11 The Importance of an Emergency Fund – Plan to Prosper
- 12 How to Prepare Financially for an Emergency When You’re Deeply in Debt – The Frugal Foot Doctor
- 13 How to Prepare for a Recession – Budgets Made Easy
- 14 The 4 Best Money Moves to Make During a Financial Crisis – Plan Save Play
- 15 Putting it all together
How I personally prepared for a recession
While my story is unique and resulted in more challenges than most people have to face, how I overcame my challenges is not. You’ll see the steps I took echoed in the advice provided by my fellow personal finance bloggers.
Widowed with a 3 year old and no income, I learned quickly how to financially recover and begin to support myself. These are the 7 steps I took to not only achieve financial security but build wealth so that I could weather any financial emergency, even a recession.
- I track my finances – to the penny
- I stick to a strict budget
- I set financial goals – both big and small
- I continually strive to improve my income
- I saved money to build a 12 month emergency fund
- I invest to build wealth and passive income
These steps helped me make the financial progress necessary to feel secure again. Here’s what other women are doing to prepare for a recession:
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How to Prepare for Recession, It’s Time for That Talk – Michelle is Money Hungry
Money hungry Michelle agrees that it’s time to face the reality that a recession is likely by the end of the year. Her focus is on making and saving more money. It’s important to diversify income streams and be aware of contracting markets. If you rely heavily upon income from markets that support travel or other areas hit by current events, consider learning new skills and exploring other opportunities.
Recession Proofing During Market Volatility – Money Mommy Mindy
Market volatility is a scary thing to experience. It’s easy to get emotionally invested in watching your investment accounts fluctuate and feel that impact. However, it’s important to not stress. The market goes down, but it always comes back up again and recovers.
Money Mommy Mindy is working hard to build the financial security and independence to leave her job and become a full time stay-at-home mom. Her key advice to recession proof your finances during market volatility include:
- Don’t panic during market fluctuations. If able, buy more stocks while they are discounted. The market will recover.
- Have 6-12 months of expenses in an emergency fund
- Reduce expenses, payoff debt
- Be consistent and persistent – stay the course
- Strive for job security and be a valuable employee
What Investing Through the Great Recession Actually Looked Like – With Pictures – Military Dollar
This is a wonderful example of what it actually looks like to invest during a recession. The point is, markets go up, and markets go down. It’s a normal occurrence. Over the long term, the market continues its overall upward trend.
Buying at a discount and contributing regularly will help you during market volatility, the key is to just keep investing and give it time.
10 Smart Money Moves You Can Make Right Now – Handful of Thoughts
Maria is a millennial mom with no desire to be tied to a job until she’s 65. In this post she points out that it is in these difficult times that we most need to go back to the basics. Focusing on what you can control now will help life feel a little more manageable.
This post provides a number of ways to focus on lowering your expenses so you can get by during difficult times, like job loss, or save more money and build up a strong emergency fund.
She also provides a nice reminder that it’s okay to ask for, or offer, help.

Ways to Make More Room in Your Budget – Cooking Up FIRE
Furloughs and lay-offs are at their highest since the Great Depression. If you or your partner are experiencing loss of work, this post provides 15 steps you can take to lower expenses and save an extra $750 a month.
PrepperFI in the Face of COVID-19 – Tread Lightly Retire Early
This is an interesting take on the crossover of FIRE – Financial Independence and Retire Early, and emergency preparedness. I hadn’t considered it, but the two have some things in common.
Many areas of Angela’s life, and her family’s journey to FIRE, have prepared them for a pandemic and economic volatility. Being prepared with survivalist and homesteading skills lightens the burden of a financial emergency.
This post also provides some helpful pandemic finance related content.
Mitigating the Damage – A Dime Saved
Many people don’t already have a hefty emergency fund saved up. If this is the case, it doesn’t help to worry or stress over what should have been. Sometimes you just have to mitigate the damage and try tread water as best possible. This post provides tips to cut back on all unnecessary expenses and find DIY solutions.
Managing Your Money During a Recession – Learning to Live Light
A recession doesn’t have to be scary, especially if you take the steps to manage your money.
Lucia provides 3 important steps you can take to manage your money during a recession. These include lowering your expenses, saving more money and getting clear on the difference between a “want” and a “need”.
Financial To-Do List While Social Distancing – Finance Over 50
At Finance Over 50, Sabrina is working hard to become financially independent, even though she started saving later in life. She makes the practical point that all this extra time at home can have its benefits. Now’s the time to review your financial to-do list. This post provides a helpful and practical list of what you can do now to get your finances in order.
The Importance of an Emergency Fund – Plan to Prosper
The #1 commonality across every post on preparing your finances for a recession is the importance of saving more money and building an emergency fund.
An emergency fund is exactly for times like this when life doesn’t go as planned. It’s for lessening the stress and burden of an unexpected expense or emergency.
If you haven’t been convinced yet, read Chrissy’s post on what an emergency fund is, why you need one and how to take action today.
How to Prepare Financially for an Emergency When You’re Deeply in Debt – The Frugal Foot Doctor
Times are difficult enough right now. But how do you navigate a recession or emergency when you are already deeply in debt?
Shannon and her husband are both podiatrists, working hard to pay off massive amounts of student loan debt. She provides the very valid point that financial emergencies look a little different when you have a mountain of debt and very little in your emergency fund.
Her post provides some insight into how you can navigate this difficult time.
How to Prepare for a Recession – Budgets Made Easy
A solid foundation will not only help you now, in the midst of a global pandemic and potential recession, but it will help you well into the future when things recover.
Ashley was able to pay off $45,000 in debt in just 17 months. Her post provides 7 tips to lay a solid financial foundation and prepare for a recession.
The 4 Best Money Moves to Make During a Financial Crisis – Plan Save Play
Every family is unique and the current economic crisis affects families in different ways. But again, there are fundamental money moves you can make that will better prepare you to weather a financial crisis. Plan Save Play provides insight into how you can review your emergency fund, cut expenses from your budget, and reach out to creditors for support.
Putting it all together
Regardless of where you are on your personal finance journey, these fundamental steps leading to financial security will help you prepare for a recession or other financial emergency.
- Understand your spending and follow a budget
- Lower expenses so you can save money and build an emergency fund
- Don’t panic during market volatility. You only lose money if you sell. Continue to contribute during a downturn and wait it out. The market will recover.
Do you have limiting beliefs about money that are holding you back?
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