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Strained supply chains. Increasing prices.  A topsy-turvy housing market. Sometimes, life moves in unexpected ways and results in a recession — six consecutive months of economic downturn.

Navigating the twists and turns of an unfamiliar economic landscape can be tricky. During a recession, many people experience unexpected job loss, making it even more difficult to keep up with financial obligations.

While external assistance like government stimulus programs may be available, you can change your financial future by adjusting your spending and saving habits today. Don’t wait until you need emergency help. There are steps you can take to prepare your finances today for an uncertain tomorrow:

• Figure out your debt
• Create a spending plan
• Consider ideas to make more or spend less
• Plan for the long haul

Figure out your debt

Credit cards. Car loans. School loans. Lines of credit. Mortgages. Everyone’s debt looks different.

When balancing your finances, remember that skipping payments, making late payments, delaying loan payments, or maxing out balances will lead to long-term effects.

If you have debt, you need a plan to pay it off. 4 tips to get started:

1. Don’t pay debt with more debt.

This is like the old saying, “robbing Peter to pay Paul.” Payment history and available credit make up 65% of your FICO Credit Score. A better credit score equals better loan rates, so understanding and improving your credit score helps immensely before, during, and after a recession.

2. Don’t skip payments.

Tempting as this may be, avoid missing payments if at all possible. When you remain in good standing with your creditors, it’s more likely they will be open to working on solutions with you. If you are afraid you won’t be able to make an upcoming payment, proactively reach out to creditors and explain your situation. You may learn of programs or payment options available to you.

3. If you can get ahead, do it.

Put more toward your debt than just the monthly interest payment. Focus on paying the principal amount as quickly as you can, and the results will amaze you.

4. Try the snowball method.

Pay off your smallest debt first and then roll that payment onto the next debt. It’s debt payment with momentum!

Create a spending plan

If you don’t tell your money what to do, it tells you what to do.

That’s why you need a budget. Review the budgeting basics, and then find a resource like Numerica’s free budget workbook to create a budget that makes sense for your life.

Building savings is an important part of your plan. Develop savings habits one day at a time by starting small. Having $1,000 in a savings account is a good initial goal. Without an emergency fund, you could be forced into debt and high-interest credit cards, so this is a step you don’t want to skip.

From there, work toward building a three-month emergency fund. Once you reach that goal, go for a six-month emergency fund. Saving money is like climbing a mountain — one step at a time.

Looking for tools to help you save? Check out Round Up to Savings, which uses your everyday purchases to automatically build a savings account. Our Bonus Saver accounts reward you for sticking to your plan.

Can you make more or spend less?

The exercise of working on a budget almost always brings up an important question. Are there ways I can make more money or spend less?

Here are some ideas to consider. Keep in mind no idea works for every situation. The important thing is to examine the question and find ideas that work for you.

Make more money

Finding a second job or side hustle is a great way to pick up extra cash. And, who knows, you might turn that side hustle into a new full-time job or business! It can also be as simple as pet sitting, house sitting, or turning your car into a part-time ride sharing or delivery vehicle.

If you have a full-time job, your side hustle money should go directly toward reducing debt or building an emergency fund. Even income from a garage sale or online marketplace makes a great snowball to begin eliminating debt.

Before taking on a side hustle, research how the additional income might affect benefits and taxes. For example, if you’re collecting unemployment, side hustles can reduce those benefits. And the IRS expects you to pay taxes on any earned income, so be sure to set aside the funds needed to cover next year’s taxes.

Spend less

Making more money isn’t always an option. But there’s almost always a way to spend less.

• Try packing a sack lunch for work a few days each week.
• Cut back on your daily latte habit by making yourself a cup of coffee to go.
• Use public transportation or ride your bike when possible.
• Consider buying store brands and keep an eye out for weekly specials.
• Reduce the number of subscriptions you have.
• Instead of meeting friends at a restaurant for dinner, plan a potluck.
• Tap the library for free entertainment — books, movies, and music.
• Check out thrift stores before heading to a full-price retailer.

Spending less just takes a little creativity and a sense of adventure!

Plan for the long haul

Recessions come and go. But when they come, they make a terrible mess of your finances if you haven’t planned for the future.

In a recession, most retirement accounts give you the ability to hit the pause button and temporarily stop monthly contributions. Even in an uncertain investment market, withdrawing from things like your retirement accounts should be a last resort. Every plan is different, so explore your options and carefully consider the consequences of early withdrawal. Then remember to start contributing again once the crisis has passed.

In the meantime, start taking steps today that will make a big difference in your tomorrows. A little Investing 101 goes a long way toward long-term well-being.

Looking forward

If today finds you examining your budget, career, or lifestyle with newfound vigor, congratulations. It’s always a smart idea to press pause and take time to scrutinize your finances and make adjustments.

If you’re looking for a partner, reach out to Numerica. We’re here for your well-being. We would be honored to help get you — and your money — where you want to be.