Market Briefs Newsletter

Subscribe to our FREE finance & business newsletter to get financial news you can finally use.

Thanks for signing up to Market Briefs! Please check your email to confirm your subscription. If you don't see the email in an hour, check your spam and promotions folder. 

Be sure to read our Privacy Policy & Terms of Use.

  • Skip to primary navigation
  • Skip to main content
  • Skip to primary sidebar
  • Skip to footer
Minority Mindset

Minority Mindset

Defy all odds.

  • Home
  • About
  • Blog
    • WEALTH
    • REAL ESTATE
    • STOCKS
    • SAVINGS
  • PRODUCTS
  • MONEY 101
  • GUAC TALK
Advertiser Disclosure

Our promise to you.

Minority Mindset, LLC is an independent, advertising-supported publisher. We are not an investment advisor. Always do your own due diligence and never blindly listen to a random article on the internet. We do our best to provide financial education with our free videos, articles, tools, and other self-help content. But these are for informational purposes only, they’re not investment advice.

Minority Mindset does not and cannot guarantee the accuracy or applicability of any information regarding your individual circumstances. The examples we provide are hypothetical and we encourage you to get advice from a qualified professional regarding specific investment, tax, legal, and financial issues. Previous market performance does not guarantee future performance.

We want everyone to be able to make educated financial decisions. We do not feature every company or financial product available. However, we’re proud of the financial education and guidance that we provide at no charge.

We’re paid by our brand partners and advertisers. This may influence which products we mention, review, and where they appear on our site. But it does not affect our recommendations or advice.

See more from Wealth

How To Ride Out A Recession

September 22, 2022 by Ashley Simpson

Ashley Simpson Author
Ashley Simpson September 22, 2022

Top Tips To Ride Out A Recession

Disclaimer

We only endorse products that we truly believe in. Some of the links below may earn us some extra guac at no additional cost to you. Please pass the chips & thank you for feeding our habit.

The prospect of another major recession looms large over the minds of almost everyone these days. Many people remember all too clearly what the last recession held for their finances and even their livelihood. 

And unfortunately, recessions are a part of an economy’s lifecycle, so it’s likely that the next recession won't be the last.

For those that want to minimize its impact on their finances, you need to know how to ride out a recession.

You can ride out a recession by cushioning your savings and avoiding the payments that come with acquiring new debt. Keep investing wisely and avoid the tendency to sell when the market seems to decline. Most importantly, do not panic and keep managing your finances the same way you did before.

This guide will give you peace of mind to help you ride out the next recession.

PlatformPromotionsLink
Get a cash bonus of $30-$500 Sign Up
Get one free stock priced up to $225 Sign Up
Get up to $1,000 after funding a new accountSign Up
Get a free slice of stock worth up to $300Sign Up

How To Ride Out A Recession

The good news is that it’s possible to ride out a recession with minimal impact on your personal bank account. You simply have to take a few extra precautions and hold fast to your strategy for managing your money. 

Here are our top tips to help you manage whatever may come your way in the financial future.

1. Cushion Your Savings

An emergency fund is key if you don’t already have one. The goal should be to save three to six months of expenses, but you can start where you are right now. 

Start by saving around $1,000 or $2,000, this will help to protect you against many of life’s common emergencies, such as:

  • A trip to the ER
  • Flat tire
  • Broken window
  • A/C replacement

It’s also important to keep in mind that you might lose your job, and this savings account can help to cover the cost of your expenses while you search for a new one in a bad economy.

Having a flush savings account means that you won’t need to acquire debt in order to make ends meet. 

Of course, if you need to spend money out of your savings account, you should make every effort to restore the balance as soon as you can. You never know what the future will hold, and a savings account helps you to better prepare.

However, try not to save too much money, either. Saving three or six months of your expenses is great, but you should not be saving your money forever.

CIT Bank

This is because our dollars lose value over time, and the longer those dollars sit in a traditional savings account, the more value they lose.

So on top of saving effectively, the next best thing you can do with your savings is to put it in the right type of account. 

A high-yield savings account like those offered by CIT Bank* will let your money work harder for you while it sits there waiting to be spent. 

You’ll earn higher interest rates on your savings than you could get with a brick-and-mortar bank, making this an easy way to cushion those savings.

And while you still won’t fully beat inflation, your money will be earning more than it would sitting under your mattress or in a traditional savings account.

Start Investing With M1 Finance Today

2. Avoid Taking On Debt

Chances are that you already know that debt is often problematic for your financial future, but do you know what happens in a recession? 

Oftentimes, the Federal Reserve will raise interest rates, compounding the amount of money you owe on a credit card or loan. You will be paying off those purchases for months (or years) to come if you aren’t wise with your credit card spending.

Incurring debt doesn’t have to mean just credit cards though. It can also mean:

  • Taking out a new mortgage 
  • Borrowing money for a business 
  • Taking out a personal loan 

The interest rates on all of these endeavors are likely to be higher during a recession and you may deal with reduced income if you’re laid off from your job.

It’s a lose-lose situation when it comes to borrowing, so try to avoid taking on any debt until the economy improves.

Featured Partners

$0 Fees | $100 Minimum

Invest Here

$0 Fees | $0 Minimum

Invest Here

$0 Fees | $1 Minimum

Invest Here

3. Invest Wisely

It sounds backwards, but a recession is oftentimes one of the best times for you to invest your money. 

Odds are that the stocks you want to buy will have lower share prices, as will real estate and possibly even crypto. 

This is a great time to get in on some of the most lucrative means of making money, but don’t try too hard to time the market.

You could drive yourself crazy watching the tickers and hoping for the right entry point. If you use dollar cost averaging, you will likely find that you’re already ahead of the game. 

Sometimes, you will get stocks at a higher price and sometimes at a lower one. The goal is just to keep pouring funds into your investment accounts.

Even if you weren’t investing previously, there’s never a bad time to start. 

For those who want to invest in the stock market, M1 Finance offers commission-free trades, and once you fund your account, you can start buying fractional shares of nearly any publicly-traded company with just $1. 

Fundrise lets you get in on real estate for as little as $10 and BlockFi can help facilitate your purchases of crypto. 

There are tons of options out there so you can find an investment strategy that works for you.

Start Investing With M1 Finance Today

4. Don’t Panic

When many people hear the word recession, they tend to clutch their money to their chest and refuse to let go of it. 

It’s certainly important to keep your savings account up, minimize debt, and continue to invest. However, you don’t want to become too extreme and end up panicking.

It’s a catch-22 when it comes to this tendency to panic. Many people will hear that a recession is on the way and immediately stop spending. This phenomenon can actually contribute to the development of a recession.

Instead, you should continue to spend but do so wisely. You may want to hold off on large buys that you don’t really need right away in favor of making more investments or padding your savings account. 

Do what you can to make yourself indispensable at work and prove your value to reduce the odds of being laid off.

All of these actions can help you to minimize the impact of a recession on your finances, but panic should never cross your mind.

Move Cautiously – How To Ride Out A Recession

For many people, riding out the recession is as simple as staying the course with their current financial strategy. 

You may want to emphasize savings and hold off on major purchases that force you to accrue debt, but you should keep on investing. 

The important thing is to avoid panic, but you should still remain financially savvy and aware of what’s going on in the world around you.

It all boils down to one final statement: move cautiously. Continue on your path but keep in mind that things can change in an instant. Be prepared for what could come your way with some of these top tips for a recession.

Stock Promotions

BrokeragePromotionLink
1 Free Stock Valued Up to $225Sign Up
Get $30 When You Deposit $1,000Sign Up
Get a free slice of stock worth up to $300Sign Up

*FDIC Insured. Conditions Apply.

Ashley Simpson Author

Written by Ashley Simpson.

Ashley Simpson has been a writer and personal finance connoisseur for almost a decade. While she definitely categorizes herself as a saver – not a spender – you will often find her splurging on a good cup of coffee!

Primary Sidebar

Advertiser Disclosure

Our promise to you.

Minority Mindset, LLC is an independent, advertising-supported publisher. We are not an investment advisor. Always do your own due diligence and never blindly listen to a random article on the internet. We do our best to provide financial education with our free videos, articles, tools, and other self-help content. But these are for informational purposes only, they’re not investment advice.

Minority Mindset does not and cannot guarantee the accuracy or applicability of any information regarding your individual circumstances. The examples we provide are hypothetical and we encourage you to get advice from a qualified professional regarding specific investment, tax, legal, and financial issues. Previous market performance does not guarantee future performance.

We want everyone to be able to make educated financial decisions. We do not feature every company or financial product available. However, we’re proud of the financial education and guidance that we provide at no charge.

We’re paid by our brand partners and advertisers. This may influence which products we mention, review, and where they appear on our site. But it does not affect our recommendations or advice.

More From Wealth

  • 13 Ways To Save Money When You're Broke
  • Robinhood Scandal - Should You Still Use Robinhood?
  • Creating Generational Wealth - 9 Ways To Get Started
  • How To Save When Money Is Tight

Get Your FREE Guide To Building Wealth

& our daily newsletter

Thanks for signing up for our financial education emails! Check your email to confirm your subscription. If you don't see the email in an hour, check your spam and promotions folder.

Be sure to read our Privacy Policy & Terms of Use.

Featured Wealth Posts

Robinhood Scandal

Robinhood Scandal - Should You Still Use Robinhood?

Creating Generational Wealth

Creating Generational Wealth - 9 Ways To Get Started

how to save when money is tight

How To Save When Money Is Tight

What Are Appreciating Assets

What Are Appreciating Assets?

The Latest On Wealth

mom with child thinking about her savings

13 Ways To Save Money When You're Broke

REITs VS Real Estate Mutual Funds

REITs VS Real Estate Mutual Funds - Which Is Better?

Roth IRA Conversion

What is a Roth IRA Conversion and Why Would You Need One?

Stock Market Investing Accounts

Best Stock Market Investing Accounts For 2022

M1 Finance Roth IRA Review – Is It Good for 2022?

Kraken Crypto Review 2022 - Why You Should Use Kraken

Binance Review

Binance.US Review 2022: A Trusted, Beginner-Friendly Option?

M1 Finance Review

The Ultimate M1 Finance Review - Great For Experienced Investors

Fundrise Passive Income

Can You Use Fundrise to Generate Passive Income?

How To Start Investing With $100 Per Month

Footer

Keep Hustlin’

Company

  • About Us
  • Store

Help

  • Contact Us
  • Advertise
  • YouTube

Legal

  • Privacy Policy
  • GDPR Opt-Out
  • Comment Policy
  • Terms of Use

Follow us on:

Disclaimer: The information on this site is of a general nature only. It does not take your specific needs or circumstances into consideration. You should look at your own personal situation and requirements, and seek independent professional advice, before making any financial decisions. Our content is provided for informational purposes only, and no content that is provided or included in our products or services is intended for trading or investing purposes. We will not be liable for the accuracy, usefulness, or availability of any information transmitted and/or made available by way of our products or services, and shall not be responsible or liable for any trading and/or investment decisions made by you based on any such information. For a further understanding of this Disclaimer and use of our site, please see the information contained in our Terms of Use and Advertising Disclaimer.

Minority Mindset may earn a portion of sales from products that are purchased or recommended through our site as part of our Affiliate Partnership with retailers and brands.

Minority Mindset has partnered with CardRatings for our coverage of credit card products. Minority Mindset and CardRatings may receive a commission from card issuers.

© 2023 Minority Mindset, LLC. All Rights Reserved.
Website managed by Stallion Cognitive™