Tori Dunlap on How to Plan for a Recession

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  • Tori Dunap's Financial Feminist podcast is a great source of money tips and tricks.
  • Many experts agree that a recession is coming, likely later this year or early next.
  • By taking the time to make a plan and get in better control of your money, you can weather a financial storm.

Afraid of an economic downturn? Tori Dunlap can help.

Tori Dunlap is a financial influencer, blogger, and podcaster. She focuses on teaching women how to manage their finances and become better at handling money. On a recent episode of her podcast, Financial Feminist, Dunlap offered advice to help her listeners prepare and plan for the recession that some financial experts agree is coming. Dunlap agrees that a recession is on the horizon, but her expert tips might be able to help you cut through the gloom-and-doom of the financial news cycle, and take the necessary steps toward peace of mind in spite of money fears and woes.

Stay informed…within reason

If the news is stressing you out these days, you're definitely not alone. Dunlap notes it'll be better for your mental health if you temper the media you're taking in, and note that news organizations and journalists are trying to get an emotional reaction out of you. If you can take a step back from the news and take a deep breath, you may be able to calm some of your fears of a coming recession and make a concrete plan for how to cope if we see an economic downturn soon.

Allay your stock market fears

Dunlap is a big believer in long-term investing, and part of being a successful long-term investor is realizing the market is going to go up and down. As Dunlap said in her show, "There's going to be all-time highs and there's going to be all-time lows. And that's the one thing that's predictable." The important thing to keep in mind about your investment holdings is that over time, the stock market grows. The average rate of investment return for the stock market as a whole is almost 10%. And as Dunlap notes, if you're investing for your retirement, and it is decades away for you, you won't need that money anytime soon. If you see losses in your portfolio, don't rush to sell and lock in those losses. Ride out the storms until retirement, and "you will not lose money," according to both Dunlap and 125 years of stock market data.

Work on that emergency fund

If you've heard it once, you've heard it a million times: An emergency fund is vital to your financial security. Dunlap is just as much of a believer in emergency funds as many other financial experts. You should absolutely have at least three months of expenses stashed in your high-yield savings account, ready for you just in case you get laid off or have another money problem. And Dunlap points out that since inflation is wreaking havoc on all our wallets, you should reassess your monthly expenses to ensure you have enough money in that account. Did your rent go up this year? How about your utilities? Add more money.

Check your expenses and adjust your budget

Another way to prepare for a coming recession is to go through your budget and spending with a fine-toothed comb. Dunlap notes that it's easy to forget about recurring costs you're paying, despite not using the streaming service, gym membership, or whatever thing you're not actually using. If you're not using it, now is the time to cancel it. And if you're living without a budget, now is also the perfect time to create a spreadsheet or even check out a budgeting app. Knowing where your money is going every month will add to your peace of mind.

Keep more of your money (and bring in more, too)

Dunlap also recommends taking some time to negotiate your bills. Maybe you're spending more on auto insurance than you need to. Ask your insurer if there are additional discounts you might qualify for. Dunlap states that she's saved about $1,200 a year by negotiating her bills. While you're cutting down on your expenditures, you might also want to diversify your income by adding a side gig. Having some salary flexibility will also help you sleep at night, knowing that even if your full-time pay is cut or you lose your job altogether, you have other income to fall back on.

There's a lot of news coming out about the impending recession, and it can be hard to parse the steps you should take to plan for it. Financial experts like Tori Dunlap can offer reassurance as well as actionable advice for Americans who are worried about what comes next.

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