Their advice is worth taking seriously.
Many people are concerned that a recession is coming soon. Financial guru Ramit Sethi has some unique tips for dealing with such an event. It’s important to give (and ask for) help and put yourself in a position to take advantage of better career opportunities as they come along.
Is a recession looming in late 2022 or early 2023? That is the big question on many people’s minds.
The Federal Reserve has been raising interest rates in an effort to slow the pace of inflation. But in doing so, it is making loans more expensive for consumers. If consumer spending declines too much, it could lead to an economic recession. And that, in turn, could put more people at risk of losing their jobs.
If you’re worried about a recession, you’re certainly in good company. And one of the best things you can do to get through it is to bolster your emergency fund. But financial expert Ramit Sethi has his own set of advice for weathering a recession, and it’s definitely worth listening to.
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1. Take care of the people who are most important to you
If a recession hits, it could affect the people you care about, like close friends and family. Sethi says it’s important to monitor those people and figure out ways they can support each other.
Imagine a recession hits and a close friend loses his job. You could offer to help them redo their resume, or you could offer to help them pick up their kids after school so they can attend a job interview.
On the other hand, you should not hesitate to ask for help if your end up needing it. If your work hours are cut and money starts to get tight, you might consider reaching out to close family and friends for help finding a part-time job to replace your missing income.
2. Don’t sell your investments in a panic
Stock values don’t always decline during a recession. But they can. And if that happens, it’s very important that you leave the investments in your IRA or brokerage account alone.
If you sell investments when they are low, you will lock in losses. There is no way around that. But if you give the market and the economy time to recover, you may not end up losing a penny in your IRA or brokerage account after all is said and done.
3. Keep looking for new career opportunities
You may or may not be laid off if a recession hits. But even if you manage to keep your job, it’s a good idea to position yourself to pursue new opportunities. That could mean learning a new skill that makes you a more valuable employee, either at his current job or a different one. It could also mean updating your resume, updating your LinkedIn profile, or doing anything else that makes you a stronger candidate for the job.
We can’t say for sure when our next recession will hit. And even if economic conditions do worsens late this year or early next, that recession could end up being mild and short-lived. But it’s still wise to prepare for a recession before things get worse. And following Sethi’s advice could end up making a difficult period that much easier.