Hi, this is Judy Copenbarger. How often do you worry about a recession? Do you know what to do in a recession? How often do you worry about a down market? Do you have any anxiety around that?

All this talk about the bad things that are going on economically and the job market. How do we deal with that? And how can we really know what’s going on? In the next few minutes, you’re going to learn how to determine when a recession is actually coming and how you can best prepare for that event.

What is a recession?


It’s that word that you hear that brings fear to your bones. You start shaking at night, you wake up in a cold sweat and you worry, how does that recession apply to me? What’s the impact on my life and my finances? What are the myths about a recession?

Let’s send cover some of those right now. Let’s get to the facts and make sure that you know when you should be concerned, if at all, should a recession occur.

Technically a recession is a negative period of economic growth for two consecutive quarters or longer.

In the United States, they happen every six or seven years. What some people don’t realize, is since 1984, we’ve only had four recessions here in the United States and we bounce back every time.

What are the indicators of a recession and what causes a recession?

interest rates

So two things cause a recession.

One of them is the interest rates that are set by the government and the other is simply the supply and demand in our U.S. economy.

supply and demand

So the way business works, is our bigger companies in the U.S. borrow money. They use the money to build manufacturing plants, to distribute their goods that people buy. When people buy more items, the economy grows.

Another way that a recession could be triggered is not by people buying less but by a natural disaster or a conflict around the world or some kind of a political event.

So the trigger for a recession is the beginning of a decline in our economy.

When people aren’t shopping so much because they’re not feeling confident about their savings, when the manufacturing plants slow down the widgets that they’re making, their production goes down, and the growth goes down, the shopping and expenses go down.

That’s the beginning of a decline that may or may not lead us into a recession.

Remember it takes at least two consecutive quarters of lack of economic growth before we can call it a recession.

So when you see evidence of a slowing of the economy, this is what we call a leading indicator.

Things like people not buying as many houses, not as many people are employed, the sales are down at the mall and online.

When you see a decline it doesn’t mean a recession is around the corner. Remember it takes two months. All it means is there’s an ebb and flow in our economy. And this is evidence of how business works in the U.S. One of the best ways that you can prepare yourself as an individual for a recession is to arm yourself with information.

How to prepare for a recession.

preparing finances

If you’d like to know more about how to be prepared as an individual for a recession, subscribe to my newsletter here real quick, and you’ll be able to stay up to date on all the information to make sure you’re prepared when the time comes.

So here’s a couple of practical tips that you can implement right now, should we find ourselves in the middle of a wave of a recession.

Make sure that you pay down your debt and increase your cash reserves. So at all times, you should have between three and six months of cash reserves in the bank or in the credit union that you can get your hands on, should something occur.

What would happen in your household if someone lost their job and they weren’t able to work for two, three, six, or eight or 10 months? Would that be the end of life as you know it or would you have substantial cash reserves savings to make sure you could weather that storm?

You know, there’s a great article called “How To Get My Finances In Order – Step By Step Guide” that you could read and it’ll help you put in place, step-by-step, what needs to happen to make sure you’re prepared when the time comes.

Following the steps on our guide will help you any time, but particularly in economic times like this.

You know, one of the best ways to prepare yourself against a recession or a depression or any other “-ession” that is bothering you, is to just be marketable.

Think about developing yourself, not only as a person but as a professional. Go to school, get some certifications, make sure you’re always delivering excellence in whatever job you have so when the time comes, you’re not going to be the first one that gets that Friday notice that you have no job.

Make yourself marketable, always do your best, and improve yourself daily. Imagine if you improved how you do your job just one or 2% per day how much better you’d be at the end of this year!


And it doesn’t hurt to find a job that is always in need. Think about the work you do. If we have a serious economic crisis, would your job still be in demand? It’s worth considering. But no matter what action you take you always want to make sure that it’s not out of fear. It’s not out of greed. It’s out of having a better life for you and for your family.

What should you do in a recession?

Here’s another money truth tip for you: When the market’s down, that means the value of each stock is down. If the value of the stock is down, isn’t that when you want to buy? Like it’s on sale, so let’s go buy it, not sell it. It’s amazing how people, when the stock goes down in value, they get upset and then they run over to the financial cliff edge and try to jump off. Why would you do that?

guy thinking in dining room

This is the time to buy. Double down on the stocks that you hold. Don’t freak out and sell them. Remember no greed and no fear.

We want to act practically and with reason at all times. So this is the time to take advantage of the sale. It’s time to get into the market. If you have extra savings it’s a good time to invest in some sound stocks or mutual funds that are balanced and can weather those storms.

We’ve got a great article for you called “Investing For beginners in 2020“, click on that article if you want to learn more about how to invest in times like this.

So, businesses will fail. People will lose their jobs. The market will wane. Sometimes it’s up. Sometimes it’s down. The crash that people always talk about, these things happen. So our goal for you is for you to be prepared in the event of any economic downturn for any recession.

Do the things you need to do, put your planning in place so if the time comes, when the time comes, you’re ready.

Now that you’re equipped with some money truth tips and basic principles that will help you, you’re prepared for any economic downturn that might come your way. Saving money, paying off debt, taking advantage of opportunities. Look at the things that it can bring into your life and try not to live in that doubt and fear and oppression. You know the most interesting thing about fear is that the more you learn, the more it dissipates, it just goes away.

So continue to educate yourself, continue to be prepared, continue to learn, and we’ll do our part to bring you all the information you need to always do your best.

Have you ever experienced a recession?

If you have, what did you learn? How were your finances impacted? What did you do differently after? Let’s start a conversation, please add your comments below. We’d like to see how a recession has impacted your life and hear from other people and what they learned.

Then you can share this article with other friends who might be also concerned or fearful about an impending recession. Let’s help them be ready as well.

Until next time I’m Judy Copenbarger.

And now that you know, you can go and grow. God bless.

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