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Preparing for Recession

MoneyWise | Aug 2, 2022

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Show Notes

Are you prepared for a deeper economic downturn? While we can’t predict the economic future, we can be prepared for it! We’ll talk about that on this MoneyWise.

  • Preparing for lean times is not only common sense, it’s backed up by God’s Word. Consider Proverbs 6, which teaches, “Go to the ant … consider her ways, and be wise … she prepares her bread in summer and gathers her food in harvest.”
  • And in Genesis 41 we’re told about Joseph as overseer for the Pharaoh storing up grain. It reads, “ … and the seven years of famine began, just as Joseph had said.
  • There was famine in all the other lands, but in the whole land of Egypt there was food.”
  • We don’t have famines in the U.S., but we do have the business equivalent, recessions. In modern times, they seem to come about every 10 years, usually following strong economic growth. So it’s never a question of if a recession will come, but when.
  • HOW TO PREPARE
  • So how do you prepare? Here are 7 steps you can take:
  • 1. SEEK WISDOM: Take five minutes to sign up for a personal finance newsletter or blog.
  • Christian Credit Counselors has a great blog about debt management and improving your finances in general. That’s at ChristianCreditCounselors.org/blog.
  • Also, our friend Crystal Paine has a daily newsletter with money-saving tips and deals. You can sign up for that at MoneySavingMom.com.
  • 2. MAKE A TO-DO LIST: Make a “to do” list of 10 financial tasks you’ve been putting off. One example is to check your credit score. If you have a credit card, your issuer probably offers this as a free service. Related to that, get your credit report from AnnualCreditReport.com. You can get one from each of the three credit reporting agencies each year for free.
  • Another idea might be to set up a high-interest savings account at an online bank. Or get disability insurance if you don’t have it. Or maybe make out your will. Just keep going until you have 10 items on your list.
  • Once you have your list, you’re ready for the third step in preparing for recession:
  • 3. TAKE ACTION: Do something. Pick one thing from your financial “to do” list and just do it! That’ll give you the satisfaction of crossing it off.
  • Then make a commitment to do another item each week. You’re much more likely to finish the list if you focus on just one item. It’s like the old joke, how do you eat an elephant? One bite at a time.
  • 4. TRACK SPENDING: Set up a system to track your spending. If times are tough, you want to know where every dollar is going. You can do this manually with a small notebook where you write down everything you spend.
  • Or you can simply have the free MoneyWise app to do it for you. It also has three ways to set up your budget, so one will be right for you. Download it wherever you get your apps. Just look for “MoneyWise biblical finance.” Or visit App.MoneyWise.org.
  • 5. FIND SOMETHING TO CUT: Once you’re tracking your spending, you’ll get an idea of how you can make your dollars stretch farther. Try to identify one area a week where you can trim or cut something altogether. A good place to start is by canceling recurring charges in your checking account for apps or streaming services you no longer use. Odds are you have a few.
  • 6. YOUR MAYDAY BUDGET: Next, work up your Mayday Budget. This is where you prioritize the four essentials.
  • Number one is food because you have to eat.
  • Two is housing because you need a place for you and your family to live.
  • Three is utilities to keep the lights on and your home heated or cooled.
  • And finally, transportation.
  • Determine how much you’ll need for those budget categories. All other bills are less important and you can always catch up on them later. That’s your Mayday Budget.
  • 7. REFLECT ON GOD’S WORD AND WISDOM: Last on the list of things you can do to prepare for a recession, but certainly not least, is take time to reflect and meditate on God’s financial principles.
  • There are more than 2300 verses in the Bible laying out God’s wisdom for managing money … so you’ve got plenty of reading to do. Maybe focus on just one a day, like Prov 22:7: “The rich rules over the poor, and the borrower is slave of the lender.”
  • And if you’re experiencing financial difficulty right now … a good place to start is with Philippians 4:19. It reads, “And my God will supply every need of yours according to his riches in glory in Christ Jesus.”
  • So those are some ways you can prepare for a recession. We hope you find them useful.

On this program, Rob also answers listener questions:

  • Does closing a credit account hurt your credit score?
  • How do you determine when it’s time to move or reallocate your investments?
  • Is now a good time to sell precious metals?
  • When is it wise to roll a home improvement loan into a new mortgage?

Remember, you can call in to ask your questions most days at (800) 525-7000 or email them to Questions@MoneyWise.org. Also, visit our website at MoneyWise.org where you can connect with a MoneyWise Coach, join the MoneyWise Community, and even download the free MoneyWise app.

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