It seems hard to believe a decade has gone by since the bleak autumn of 2008.
After a seemingly bulletproof housing market finally fell off the cliff, it was a steady trickle of depressing news: the federal takeover of Fannie and Freddie, the sudden demise of Lehman Brothers, the 11th-hour rescue of AIG.
As the business reporter at a small Midwestern newspaper, it was my job to chronicle the local impact. Day after day, I’d write about how this or that employer had slashed its staff. A couple months later, it was me – along with more than half of our newsroom – on the chopping block. Somehow it was still so jarring.
Suddenly, there I was, a young journalist with a mortgage to pay and a year-old baby to help support. Like most victims of the Great Recession, I landed on my feet, though not before months of anxiety and self-doubt.
After a nine-year expansion, the economy looks like it could finally be heading for another slump. According to a recent survey by Duke University, nearly half of CFOs think a recession will arrive before 2019 comes to a close; 80 percent believe it’ll be here by the end of 2020.
The fact is, economies are cyclical. And whether a downturn happens next year or not, it’s important to be prepared. The last recession snuck up on a lot of us who thought the good times – and rising home prices – would never end.
These days, we know better. Here’s how to stay on solid footing, even if the recent stock market retreat gives way to a broader economic downturn.
Build your Emergency Fund
By now, you probably know to save up enough cash to cover anywhere from three to six months’ worth of expenses. And yet research suggests relatively few of us are doing it. Only 29 percent of Americans have enough liquid savings to cover their needs for a full six months, according to a Bankrate survey from earlier this year. And 23 percent have no emergency fund at all.
The troubling economic news – a flatter bond yield curve, for example – may not indicate an imminent recession. But it should be a wake-up call…
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