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How to Prepare for a Recession (What Should You Do Before a Recession?)

How to prepare for a recession so that you take care of your family’s financial well-being. Plus tips for how to ride out a recession.

You’ve probably seen headlines (and possibly ignored them, as I’ve tried to do) about the next great recession landing on our doorsteps.

young asian family on couch, text overlay

Will it hit this year? Wasn’t it supposed to hit last year? How is 2020 and beyond looking?

You, and everyone else, has a ton of questions about recessions (probably mostly around how to prepare for a recession to put your family in the best position possible).

Today, I’d like to focus on the steps you can take NOW to prepare you and your family for the next recession.

And I say “next” recession because, as the data has shown us, it will come.

We don’t all know when, but a recession is a natural economic “thing” that occurs. And the more prepared you are? The less financial stress you’ll feel.

When Will the Next Recession Be, and How Long Do Recessions Last?

I can remember the last recession like it was yesterday – I had just moved to Houston, and taken a job with the state of Texas as an Air Quality Investigator.

Hurricane Ike hit the week that I was supposed to start, and so I had off for my first full week on the job (not bad, eh?).

September continued, and I would take my lunches in the cafeteria downstairs. CNN played each day, and I watched the roller coaster ride the country’s economy (and, all of us) were taking unfold before me – plummeting stock market values, layoffs, the banking industry seeming to crash a bit around us.

One big thing that I learned during the last recession is that a recession is actually “natural” in the U.S. Roughly every 8-10 years, our economy goes into a slump – brought on by any number of factors. And then, things start to lift and get back on track again.

According to Forbes.com,

“There were 33 business cycles in the United States between 1854 and 2009 based on the National Bureau of Economic Research. The average length of a growing economy is 38.7 months or 3.2 years. The average recession lasts for 17.5 months or 1.5 years. A full business cycle on average is 4.7 years.”

The Great Depression lasted 3.6 years, and the Great Recession lasted 1.5 years (just to give you some perspective).

Great. Now that we know a bit more about why recessions occur (because they’re natural – what’s unnatural is an economy that expands all the time), and about how long they last…let’s move onto how to prepare your family for the next recession.

How to Prepare for a Recession (How to Prepare for 2020 Recession)

This is the section you really, really want to pay attention to.

In fact, this is the whole reason I decided to write this article on a Saturday – I’m concerned about you + your family’s well-being, and I have knowledge about how to prep for the next recession that could help.

So, let’s jump into it. Because the sooner you can get started taking the steps, the better.

#1: Optimize Your Credit Lines

I absolutely never want to give you advice that will put you more into debt. But let’s face it – sometimes the sh*t hits the fan, and you have to figure out what is the best option about of 2-3 sucky choices.

Should you need to tap your credit line and put groceries or rent payments or whatever else onto your credit cards – either because someone has lost their job, there have been pay decreases, or whatever else pops up – you want to do it in the healthiest way possible.

In order to do that, you have to prep now.

Go ahead and get your free credit score (Credit Sesame is a great place to go for this), and see if you’re in a better position than what you were in before you applied for your credit cards.

Then, call your credit card company, and ask for two things:

  • A Lower Interest Rate: This means that any purchases you make in the future will cost less in terms of carrying costs (interest you’ll pay each month). It’s just a good preventative measure in case you need to start charging up your cards for living expenses.
  • A Higher Credit Line: Can they offer you a bit higher credit line so that it’s available to you if you need it?

Again, I do NOT want you to have to use your whole credit line, or to charge anything on your cards at all.

But you want to set this up as almost an insurance policy in case things get tight (specifically if you don’t have a full emergency fund).

#2: Sync Your Debt Payments with One Person’s Income

If you live in a two-income household, then you should go through this exercise. It’s eye-opening, to say the least.

What if one person loses their job?

Take the remaining income, account for a little from unemployment insurance (if you’d like to be really conservative, then don’t count on unemployment insurance), and then figure out how much debt you can still pay each month while covering your other costs (groceries, utilities, gas, etc.).

Now, start asking yourself questions like these:

  • How much are your debt payments each month, as is?
  • What’s the difference between the two (your one income, and your debt payment)?

Your goal is to be able to survive on one income alone, even with your debt payments. And if you can’t? Then start paying down that debt quicker.

Speaking of debt and recessions…I’ve got more to say on the subject.

#3: Lower the Minimums Due on Your Debt

If you end up without a job in a recession? Then you need to be in a position to still make each of your minimum payments due on your loans (like credit card bills, student loans, car notes, etc.).

This means right now, you should be partly focused on getting your minimum payments down as low as you can.

Not worrying about your debt payoff strategy, as far as paying down the debt with the highest interest rate or anything like that. But actually getting your minimum monthly payments lower.

For example, student loan debt payment amounts each month generally don’t decrease, no matter how much you’ve paid off. But a credit card debt minimum payment? Now that goes down when your balance decreases.

SO, in a recession (or if you think you’re staring down the barrel of a recession in the not-too-distant future), you’ll want to send extra money towards that credit card debt over your student loans, since that is what will lower your overall debt minimum payment amount.

Other ways to lower your minimum payments due include:

  • Making Consistent Payments: For student loans, you may be able to get an interest rate deduction after 36 consecutive (and consistent) monthly payments. How far away are you from making this happen?
  • Doing a Balance Transfer to a Lower-Rate Card: You can do a balance transfer of credit card debt to a different card with either an introductory lower rate or an overall lower rate than what you’re currently getting (just be aware of whether or not the overall rate on the card isn’t higher than your current card once the introductory rate expires).
  • Asking for an Interest Rate Decrease: If your credit score is better than it was when you first applied to the card, and you have been making consistent payments, then call up your credit card company and state your case for why you’d like an interest rate deduction. Have you received any other credit card offers in the mail in the last several months with lower rates? Keep these, and use them as part of your argument.

Pay down your debt as much as you can right now – more than the minimums – but set yourself up for lower minimum amounts due to prep your finances for the next recession.

Psst: you’ll definitely want to do this with the next step in mind, though. Because it’s even more important.

#4: Grow Your Emergency Fund

Let me ask you this: in a survival situation, is it more important to have your debt paid down and no money in the bank, or money in an FDIC-insured bank (a truly important detail, given the number of banks that failed during the LAST recession) and a higher amount of debt?

Since we’re talking recessions, the answer is having money in the bank. If worse comes to worse, you will go to collections for not making debt repayments during a recession. But what happens if you can’t buy groceries, or can’t pay your rent? Then you’d be in a much bigger pickle.

Focus your efforts on growing your emergency fund to at least six months (ours is one year).

Psst: the good news? Growing your emergency fund isn’t as annoying as you think. Here’s emergency fund example amounts. Also, here’s 250 money saving tips that will help you with this.

#5: Consider Taking a Recession-Proof Job

This one isn’t black and white. Because if you move jobs now, you could easily be the person they cut in case they DO need to cut jobs, since you don’t have seniority.

However, it’s one to consider, simple because there are certain professions that are much more recession-proof than others. I’ve got a whole section below on what are considered recession-proof jobs, so be sure to check that list out and see if you could apply to one (or if you’ve been offered one).

For example, my husband and I just moved for him to quit his job in an unstable employment situation to a much more stable one with the U.S. Army. On top of government employment being more recession-proof than non-government employment, he’s also not considered the newest guy there because they take his Navy service years into consideration when determining seniority.

It was a strategic move on our part.

#6: Start Earning Money on the Side

I’m not saying you need to get a second or third job. But wouldn’t now be a great time to start a few side hustles to earn an extra $100 or more per month?

There are TONS of opportunities to earn money while watching TV or on the weekends. I’ve got an entire article on 37 ways to earn cash fast, from home. I’ll highlight a few here:

  • Sign up for SwagBucks, and earn money just for searching on the internet. Seriously – I’ve been doing this since the last recession (started in March 2009), and I’ve since earned a total of 372,296 Swag Bucks, which has translated into $3,700 in cash to my PayPal account!
  • Start earning cash for your walks through apps like SweatCoin and GymPact.
  • Get paid for work from home opportunities (here’s 23 ways for how to make cash from home). There are lots of survey sites where you not make much money, but with Respondent Market Research, the payout rates are way better.

#7: Sell What You Want to Sell

If you already have things that you know you want to sell – say, a car, a home (we’re currently trying to sell ours), an old car – then now’s the time to get it on the market and try to sell it.

That’s because (and you’ll likely remember this) once a recession hits, the market gets flooded with people trying to sell their old belongings, cars, and everything else.

Since this happens, and because there’s less demand with more people out of work, you have to sell for less (or not sell at all).

Psst: here’s how to sell scrap for cash.

#8: Get Your Resume Updated

Even if you’re not in the job market, you want to keep your resume updated.

Start by brainstorming all the accolades, certifications, projects you’ve been part of, and anything else that you haven’t accounted for on your current resume.

Look through old files in your filing cabinet at work, your company’s business reports, old flash drives, and anything else you need to get as specific as you possibly can.

Specifics you want:

  • Exact names of certifications
  • Dates and years for everything
  • Results with actual figures (like amount of money the project saved or made a company/organization, and client retention rates or client acquisition rates, etc.)

Once you go through the actual process of updating your resume, give it to three different people to review. Ideally, you’d give it to at least one person in your industry, one person who is not in your industry, and one person who is used to hiring people.

Then, revise.

Take the time to do this now, when you’re not scared about looking for work, and you’ll thank yourself later.

Speaking of jobs…let’s talk about which ones are considered “recession-proof”.

What Jobs are Recession-Proof?

One of the top things you can do to prep for the recession is to do what I unknowingly had done – get into a job that is recession-proof.

Bonus Tip: You definitely don’t want to be in a job where you mainly get paid by commissions. Sales drop for most products (not all) during a recession. You do the math.

I was fortunate in that while I was unemployed for several months in 2008, I finally got a job offer to start working for the state government of Texas on August 28th. To be completely honest, I didn’t want the job. I thought it was cool, but it earned much less than I wanted to earn.

However, I reached out to my college career counselor and friend, and asked her for her thoughts. She gave me very sound advice by telling me that I should take it, if only for the fact that the country was headed into a recession and it would be a stable job.


The TCEQ where I worked did not lay off anyone during the recession, though they did put a hiring freeze on all positions and also cut expenses a good bit.

So, what are the types of jobs that are more recession-proof than others (because, let’s face it, there’s no guarantees in life)?

Recession-Proof Professions

Author of The Best 150 Recession-Proof Jobs was interviewed by Time Magazine during the last Recession.

Basically, you want to be in jobs that are in high-demand, or that revolve around basic human needs, or that are with the government.

Such jobs include:

  • Healthcare (though dentists and other less-necessary professions do not fare as well during recessions)
  • Air-traffic controllers (huge shortage of these in the U.S.)
  • Education
  • Utilities
  • Law enforcement
  • etc.

Here’s a more detailed list for you.

How to Ride Out a Recession

Alright, you’ve begun prepping for a recession, but what happens when it hits? How do you actually ride a recession out?

I’ve got a few ideas for you.

Psst: You might want to check out my articles on how to survive unemployment, steps to take to prepare yourself for a furlough, and how to find health insurance during unemployment.

  • Stay in “Safe” Positions: Not great career advice here, but good financial advice — when I was working for the State of Texas, during the recession years, not one person left the agency. But before the recession and after it eased up? The turnover rate went back to its original amount. That’s because during a recession, you don’t necessarily want to make a move to another company/agency/organization where you would be the junior or last (wo)man on the totem pole (meaning, you might be the first upper management thinks about laying off, when times get tough). This usually works itself out, as there are less job opportunities during a recession, but it’s worth mentioning.
  • Use Your GI Bill Benefits: My husband lost his job several years ago. But what was great was that he was actually a full-time college student through his GI Bill. And on that bill, we received a monthly housing stipend. If you have access to a GI Bill where you won’t have to pay for a college education, and you might even get a perk like housing allowances, then you would want to look into that.
  • Go into Savings Protection Mode: One of your top priorities when riding out a recession is to protect your savings. Don’t take from it for willy-nilly things. Only tap it as a last-resort resource, because you don’t know how long you’ll need it to last. Defense, defense, defense.

One more career tip that I had to learn from experience: be wary of taking a job in a location where there aren’t many other job options. If you do, and you get laid off, then you’ll have to move to find any work (which can cost a good bit).

For example, I took a marketing research and innovation job in Florida. It was great! Until I was laid off 1.5 years later. There was virtually no job market for me, and I had to move. Of course, my life turned out well…but just wanted to give you the heads up.

This article was not written to scare you or to drum up unnecessary fear surrounding the next recession. It’s a practical article, written by a person who has both been laid off twice (her husband an additional two times), and who has an eye for the future. Because it’s not a matter of “if” a recession comes, it’s a matter of “when” the next recession comes, since recessions are just a natural occurrence for economies. It’s better to prepare yourself now for the next one, instead of waiting until it’s right on your doorstep.

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Amanda L Grossman

Personal Finance Writer and CEO at Frugal Confessions, LLC
Amanda L. Grossman is a writer and Certified Financial Education Instructor, Plutus Foundation Grant Recipient, and founder of Frugal Confessions. Over the last 13 years, her money work has helped people with how to save money and how to manage money. She's been featured in the Wall Street Journal, Kiplinger, Washington Post, U.S. News & World Report, Business Insider, LifeHacker, Real Simple Magazine, Woman's World, Woman's Day, ABC 13 Houston, Keybank, and more. Read more here or on LinkedIn.