Suze Orman Says a Recession Might Hit Next Year. Take These 5 Steps to Prepare

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  • Many financial experts think the U.S. economy will decline in 2023.
  • There are moves you can make in the near term to weather that potential storm.
  • Whittling down your high-interest debt, getting a side job, and networking to grow your professional network are all solid concrete steps you can take to be ready for a possible recession.

Economic conditions could worsen. Here's how to gear up.

Will a recession strike in 2023? That's something a lot of people are worried about. And financial guru Suze Orman says there's reason to be.

In a recent podcast episode, Orman acknowledged that a recession could hit in the near term. But if you make these moves, you can set yourself up to get through that scenario.

1. Boost your emergency fund

The scary thing about a recession is that it has the potential to fuel an increase in layoffs. But if you arm yourself with plenty of cash in the bank so you're able to pay your bills without a paycheck, that won't be as huge a concern.

Now as a general rule, it's a good idea to have enough money in your savings account to cover three to six months of essential bills. But the pandemic has prompted a lot of experts to suggest going above that threshold and socking away up to a year's worth of bills.

If you can't do that, just do your best. Padding your savings to any degree is a helpful thing to do when there's the possibility of an economic downturn.

2. Pay off high-interest debt

If a recession strikes in 2023, the last thing you'll want is expensive credit card payments hanging over your head. So now's the time to work on whittling down that debt. Apply extra money to your current balances, or look at a balance transfer that lets you move your current debts over to a new card with a 0% introductory interest rate.

3. Get a side hustle

With inflation soaring, you may not have much money left over in your paychecks to boost your savings or pay down debt. That's why it pays to get a second job temporarily. You can use your earnings to tackle those goals so you're in a better place financially. And also, if layoffs start happening at your main job, you might be able to ramp up on your side hustle if you're downsized out of your role.

4. Boost your job skills

Being great at your job won't automatically spare you from getting laid off if your employer is forced to make cuts. But might it help buy you some protection? Probably. So now's a good time to focus on growing your job skills. And if you recently sat down with your manager for a performance review, take that feedback to heart.

5. Expand your professional network

If you find yourself out of a job next year, you might have to rely on your network of professional contacts to find work. Take the time to grow that network in the coming weeks or months so you have more people to reach out to should the need arise.

The idea of a recession can be very scary -- there's no doubt about it. But if you make these key moves now, you might lose a lot less sleep over the idea of the economy taking a tumble and driving unemployment levels upward.

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