How to Get Ready for the Next Recession

The stock market ended 2018 down 6.2% (based on the S&P 500 index). This was the worst performance since 2008.

The Federal Reserve also raised interest rates four times last year. Higher rates make it more expensive for people and companies to borrow — so the result is reduced consumer spending, less business revenue, stock market declines, and job losses.

Whether the next economic recession is weeks or months away, it pays to be prepared.

Here are a few things you can do:

1. Review your investments and speak with a professional financial advisor. Wealthsimple helps you build a portfolio of low-fee funds and gives you access to expert financial advice. Sign up using this link and you’ll pay no management fees on your first $10,000 for a year.

2. Get a high-yield savings account and reduce your spending. Higher interest rates mean that you’ll earn more interest on your savings.

If you have more than $25K in savings or can make a monthly deposit of $100, check out CIT Bank’s Savings Builder account paying 2.45% APY as of Jan 3rd (this is one of the best rates in the country).

Otherwise, consider American Express’s savings account paying 2.10% APY as of Dec 20th with no minimums.

3. Refinance your debts using a fixed-rate loan. Most banks have “variable” interest rates which go up when the Fed Rate does. Protect yourself against rising rates by consolidating your debts using a fixed-rate loan.

Upgrade loans always have fixed rates. So they can be a great option.

Loans through LendingClub also have fixed rates, so you may want to check and compare rates before switching.

4. Track your finances and earn cash rewards. Status Money analyzes your finances to find opportunities for you to improve — then gives you cash rewards for taking action. Join today and you’ll earn a $5 bonus.

Advertiser Disclosure: Status Money may receive compensation from some of the links in this post — these commissions enable us to keep Status free for everyone.