A recession is not just something economists argue about on TV. It is something that could shake your job, your savings, and your day-to-day life. With rising odds of a downturn, financial experts say now is the time to get your game plan together.
Recent shifts in global policy, like Trump’s steep tariffs and increased trade tensions, have pushed recession risks higher. The IMF says there is now a 40% chance the U.S. economy could slide into a recession this year. J.P. Morgan puts 2025’s odds at 60%.
So, what should you actually do if a recession hits, or is even on the horizon? And just as important, what should you not do?
Keep Your Job Even If It Is Not Perfect
In a recession, job security is king. This is not the moment to test how flexible your company will be with work-from-home perks or your creative side hustle dream. Companies facing pressure cut back fast. And it is often the most vocal or least flexible employees who get the axe first.
Karolina / Pexels / The last thing you would do in a recession is be jobless. Keep your job, experts say, even if it is not perfect.
Even if your job is not thrilling, staying employed gives you stability when things get shaky. It also keeps your benefits intact and your résumé up to date. The time to get picky is when hiring is hot, not when layoffs are everywhere.
Don’t Wait to Job Hunt
Start looking now if you have already been itching to leave your job. A recession slows hiring and boosts competition. So the longer you wait, the harder it could get.
Think ahead. Is your industry prone to downturns? Hospitality and retail get hit first. Healthcare and utilities tend to hold steady. If you are in a risky field, polish your résumé and reconnect with your network.
Better to make a move before you are forced to.
Spend Smart
Booked a vacation months ago? Don’t cancel it just because “recession” is trending. If your job feels stable and the trip is paid for, go enjoy it. Mental health and rest matter too.
But maybe skip the spontaneous spending sprees. Keep spending under control. You don’t need to lock down every dollar, but you should know where they are going.
Don’t Cut Your Retirement Contributions
When budgets get tight, people often pause 401(k) or IRA contributions. But that is short-term thinking. If you are young, time is your biggest advantage. Missing even a year of compounding interest can cost you big later.
Olly / Pexels / If your employer offers a match and you are not contributing, you are literally leaving money on the table. Cut elsewhere first.
Your future self will thank you.
Track Your Spending Like a Hawk
Want to stop living paycheck to paycheck? Start by tracking every dollar for one month—every coffee, every impulse buy. Use an app, a spreadsheet, or plain old pen and paper.
Once you know where your money goes, it is easier to cut the waste. That is how you build an emergency fund, which, during a recession, is your safety net. Aim for three to six months of expenses saved.
Cut Costs Without Cutting Your Lifestyle
You don’t need to cancel all joy to save money. Start small. Cook more meals at home. Cancel that gym membership you never use. Negotiate lower rates on bills. Take care of your car instead of shopping for a new one.
Saving money during a recession is about being smarter. The goal is freedom, not just frugality. Every dollar saved gives you more breathing room if things get rough.