Recession fears are rising as stock markets tumble, consumer confidence sags and economists lower their growth forecasts. A recession typically entails two consecutive quarters of negative GDP growth, and it can be difficult for households and businesses to survive unless they are prepared.
Despite this, most analysts still do not believe we are currently in a recession. However, the risks are significant enough that it is a good idea to take steps to protect your finances.
For instance, consider keeping a large emergency fund and maintaining strong credit. Also, make sure to pay your bills on time, and limit how much you use your credit cards. Lastly, if you are struggling to afford your mortgage or car payment, consider applying for a hardship application with your lender to see if you can get some relief from your loan payments.
If you are concerned about your ability to pay your debts, it is also a good idea to talk to your lenders and consider seeking loan modification or shortening the term of your loans. These are just a few examples of smart financial habits that can help you weather any economic slowdown or recession.