The good news? The New York Times is reporting that companies added 80,000 jobs in June. The bad news? There is still a 40 percent chance of a recession in 2012, according to InCharge Debt Solutions, a nonprofit organization devoted to helping consumers resolve their debt problems.
With the risk of recession still hanging over Americans’ heads, now is not the time to cut back on being smart with your money. In fact, everyone should soldier on in their frugality.
“Whatever happens this year, history has proven that another recession will come, maybe not in the next six months, but in the future and being ready for it is crucial,” says InCharge President Etta Money.
Here are 5 steps every consumer should take or continue to be taking, just in case of recession:
- Reduce your debt. Paying for debt instead of life’s necessities (food, shelter, utilities) is counterproductive, particularly during a recession. Take steps to pay down your debt as much as possible before another downturn.
- Create an emergency fund. Even if you only have a small amount of “extra” money every time you receive income, put as much as you can away in case there’s a recession.
- Cut your expenses. It is amazing how many things you can save on when you really put your mind to it. Cable, insurances, entertainment, there are always ways to cut. (Here are 5 ways to save $500 a month.)
- Be a better employee to avoid a layoff, hopefully. Work harder, do more at work, become more visible and more valuable to your employer. Who knows, you may get a raise or a bonus!
- Do a financial inventory. Companies like InCharge offer free credit counseling during which a certified professional evaluate your financial situation, budget, and spending habits, and develop a strategy to help you deal with whatever the American economy throws at you, even recession.
Adds Money, “It is prudent to be prepared for every contingency. Hopefully, the economy will continue to improve, but if it doesn’t, we all need to have a plan for whatever the financial markets bring.”