| While financial experts continue to debate whether a recession will happen, most Americans are apparently convinced we're headed for a big economic downturn.
A variety of surveys and research reports have concluded that many Americans expect a recession and are bracing for it as they look for ways to be prepared. For many, the biggest recession warning sign is high inflation, and that will obviously fuel feelings of concern.
One expert who spoke with CNBC said: "When something as fundamental to people's everyday lives as gas prices and grocery bills goes sky-high, it really has a huge impact on the way people look at things."
A survey that CNBC reported on found that 82% of Americans polled worry inflation will have a negative impact on their purchasing power in the next six months. Moreover, the same share of respondents said they expect inflation to get worse over the next 12 months.
It's obvious that a recession will impact your everyday life and budget. So, what are things people can do to prepare?
The CNBC personal finance team spoke to some financial advisors and they say there's plenty of things people can do as both consumers and as investors. Since no one can predict when a recession may happen, it's best to focus on what's actually in your control, such as how much you're spending and saving, one advisor said.
Here are some tips from financial experts: - Evaluate your budget every month to see what expenses could be eliminated. After cutting out unnecessary expenses, increase your savings budget as much as you can. Ideally, 20% of your income should go to your savings.
- Track each debt account (mostly credit cards) you have to see how much you owe and your various interest rates. Focus on contributing more of your income to debt that holds the highest interest rates.
- Try to maintain your budgeted 401(k) plan contributions. It can be stressful to continue to put money in while a recession is looming, but keeping up with these can benefit you in the long-term.
- Whether your investments are doing well or not, avoid making emotional money decisions. If the market takes a turn for the worse, consider riding it out for any upswings.
For more cool stuff like this, be sure to visit CNBC's Financial Advisor Hub and Personal Finance section. |
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