A recession is a lagging indicator. You’re already in one before it’s “official.”
(A recession is two consecutive quarters of negative GDP “growth”)
A recession is coming. Everyone knows it.
We expected it after so many years of economic growth but the coronavirus was the straw that broke the economy’s back. And in a very serious way.
There are steps you can take right now to better prepare for the coming months. We won’t know how deep or how long the recession will be but you can prepare for when it comes.
First, here’s a massive resource you can use for some coronavirus relief, courtesy of Erin of Broke Millennial:
Broke Millenial’s Covid-19 Relief Hub – It has everything you could possibly need to get up to speed and assistance dealing with COVID-19.
Next, to help with the coming recession, an article from the May 2010 issue of HBR that was meant for businesses but there are lessons you can take and implement in your personal finances too:
When You’ve Got to Cut Costs—Now [Harvard Business Review] – “You’ve been a good manager of a large department for some time now. You’ve run a tight ship. When possible, you’ve cut costs. But now an order has come down (from high enough above that you don’t have the liberty of debating its wisdom or feasibility) decreeing that you must find an additional 10%, 20%, or even 30% in administrative cost reductions, severance aside. You just don’t see how it can be done.”
Next, we have what the Frugalwoods are doing right now:
How We’re Managing Our Money During the Coronavirus Pandemic [Frugalwoods] – “Nothing good comes from panicked investing/un-investing. Pulling our money out of the market right now would be the equivalent of selling at a loss. Additionally, trying to time the market and shoveling more money into it could prove unwise since we have no idea if the market has hit bottom yet. For me, the key to weathering a storm like this is to stick with the plan I created when the markets were good.”
This last one is again focused at business but you can do this yourself to help with thinking of the future. Make sure you get to the part where you take two axes and write headlines, that’s when I had my “a ha” moment:
How Futurists Cope With Uncertainty [Amy Webb on Linkedin] – “Futurists use a simple tool in times of deep uncertainty. It’s called the Axes of Uncertainty, and it’s easy to understand and apply. I’m going to walk you through how to use the tool in your organization, and even to help you grapple with disruption in your personal life. Some of what you surface in this activity will highlight opportunities you didn’t see before, and you will likely also see existential risk you’d never imagined. The more plausible outcomes you can discover, and the more flexible you can be in your thinking and planning, the more assured you will feel about your futures. That’s how you break the vicious cycle of corporate anxiety. And there’s an added benefit: if you identify existential risk early, you have time to take action.”
From the Axes of Uncertainty to the Axis of Awesome, a fun video about how many pop songs are the same four chords:
(I know I’ve shared this video before but I couldn’t help the cheesy “Axes to Axis” line!)