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With all thats happening now, its reasonable to worry about a potential recession.
But instead of panicking, its time to prepare.
Here are five recession money rules you could consider following now.
Also seefive money mistakes the middle-class should avoid in a recession.
Shore Up Your Emergency Fund
Cash is king during a recession.
To hit this goal faster, adjust your budget, delay major purchases and cut discretionary spending.
double-check you keep your emergency fund in an accessible account.
Consider a high-yield savings account that grows your idle cash.
Money market accounts and certificates of deposit are also good options.
Thats why getting out of debt should be a priority.
You dont need to be 100% debt-free to weather a recession, though.
The goal is to reduce your financial burden down the road.
During a recession, companies trim budgets, reduce workforces and freeze hiring.
The best way to prepare is by planning for a job loss before it happens.
Most importantly, stack skills.
Even if youre happy at your current job, the earlier you prepare, the better.
Build Multiple Income Streams
Relying on one income source is risky.
Consider building multiple income streams.
However, history shows that panic-selling almost always hurts more than it helps.
Recessions come and go; markets always recover.
Market downturns often create the best buying opportunities.
So use this time to buy the dip and invest in high-quality companies.
And if youre risk-averse, considerinvesting in low-cost index fundsand exchange-traded funds.
Decades from now, youll be happy you stayed the course.
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