If you haven’t already buckled down for this recession, it’s not too late to start. We live in a tale of two worlds where ~32.1m now jobless Americans are receiving very significant government stimulus along with businesses in a number of ways.

So, how do you prepare? 

1.  Always have an emergency savings fund, ideally equal to at least 6 months of your average expenses. To be on the safe side in the current climate, 12 months is more ideal. If you haven’t started building one yet, you can start now. Financial safety is key to long term financial success.
2. Generate a safe return on your idle cash like your emergency savings fund. While most major banks have paid close to 0% interest since 2009 on savings accounts and abysmally low CD rates, there are a number of banks that maximize interest on your idle cash. The last few years, we have been using DepositAccounts.com to find the highest interest rates:
   Check out the latest & highest CD interest rates available.
   Check out the latest & highest bank interest rates available.
3. Optimize your credit score. Banks are tightening lending standards (aka making it harder to borrow) across home loans, auto loans, credit cards, and other lending products due to high levels of uncertainty in the economy. If you find yourself in a bind, a strong credit score may serve as a helpful lifeline. If nothing else, a strong credit score will help ensure you can continue living your life (e.g. buying a home, or a car) with fewer hurdles during the recession.
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4. Refinance your mortgage if you own a home. Mortgage rates are at record lows: A 30 year mortgage is now below 3% APR while the 15 year is as low as 1.99% APR with the most aggressive lenders. This is a great way to lower your monthly payment, save some extra cash every month, and/or build more equity.
   Compare rates today with BankRate
   Once you have some quotes, make sure it actually makes sense with Nerd Wallet’s Mortgage Refi Calculator
5. Pay down credit card debt. Credit card debt sucks. It’s a real trap with average credit card interest rates at roughly 16.03%. Pay it down as quick as possible, as long as you aren’t compromising your financial needs.
6. Maximize credit card rewards. Using credit cards with discipline is a great way to generate some extra cash via rewards, but it only works if you always pay the full balance on your credit card monthly.
7. Take advantage of bank credit card promotions/offers. Most banks now have an “Offers” or “Promotions” tab when you login for various retailers/products/services that you likely use regularly. You typically need to activate this offer in your login with a particular credit card. Here’s an example of current deals from Chase Bank (there is 44 available as of 8/6/2020):
   

BOTTOM LINE: We’re in the midst of a recession that has largely been masked by massive government stimulus. A lot of that major stimulus is now decreasing, and it’s time to be cautious with your finances until we have more clarity on where the recession is headed. Don’t make any financial decisions that could easily backfire… consider if you have enough cash/assets to live for 12 months without a job. It’s a strong exercise in general because life does happen. Hope for the best, plan for the worst.

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