‘Prepare for the worst’

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Talk about a dire warning.

Key Point

• Many experts believe the economy is headed for recession.
• JP Morgan CEO Jamie Dimon has a particularly negative outlook.
• You can prepare for the worst by increasing your savings, cutting unnecessary expenses, and increasing your income from a side business.

Will we enter a recession in 2023? It is a really big problem and many experts believe that the economic situation is about to deteriorate in a serious way. I have.

In fact, if you ask JP Morgan CEO Jamie Dimon what’s in store for the economy, you might not like the answer. Dimon recently told lawmakers that they should “prepare for the worst” as the economy progresses.

This isn’t the first time Dimon’s warning has been remarkably dire. But doing what you can to prepare for next year’s recession, whether it’s short term or long and painful, will pay off.

increase your savings

One of the best things you can do to prepare for a recession is to increase your emergency savings. At a minimum, you should have enough money in your savings account to cover three months of necessary living expenses. But it’s really minimal. If you want better protection, aim for 6 months to 1 year of bills.

Now, a 12-month emergency fund may seem a bit excessive at first. But remember, if a recession hits, it could be over quickly or it could last. Therefore, if you can save enough money to cover your bills for a year, you will feel less stressed if you lose your job and it will take longer to get back to a competent employment. increase.

throw away unnecessary expenses

The more you manage to cut your extra spending, the more money you can free up for emergency savings. Plus, a recession can hit and affect your income, so getting used to the idea of ​​spending less isn’t a bad idea.

Think about the different things you pay for on a regular basis. You might enjoy a $15 streaming service and watch it night after night, so it needs to be maintained. But if you rarely look at the cable, cut the cord.

get a second job

A side hustle can be your ticket to boosting your savings ahead of a recession. But it can also serve as a backup source of income if you lose your job.

Let’s say you start working 10 hours a week as a side job while still employed full-time. If you lose your job in 2023, you may be able to increase your side hustle to 25 hours a week to make up much of the lost income.

Jamie Dimon makes multiple predictions about a painful recession, but the reality is we don’t know what the economy will look like in the next 12 months. But if you want to be less worried about a recession, do what you can to prepare for it while the economy is still in pretty good shape.