10 Money Moves to Make Right Now if You Are Worried About a Recession
- - 10 Money Moves to Make Right Now if You Are Worried About a Recession
Dan SmithDecember 27, 2025 at 12:26 AM
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Recession worries tend to surface when the economy feels unsteady, and right now that unease is hard to miss. Hiring has slowed, unemployment has edged higher, and raises are becoming less generous as businesses rein in spending. Meanwhile, everyday costs continue to rise, from groceries to insurance bills. When the job market starts sending signals like these, the most practical response is not panic. It is taking a closer look at how money moves in and out, and making small, deliberate changes that help protect income and keep risk in check.
Build an Emergency Fund
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Job losses often arrive without warning, and layoffs have already begun to increase. Financial planners typically recommend setting aside three to six months of expenses as a buffer against potential income disruptions. High-yield savings accounts currently offer an interest rate of nearly 4.00%, compared to a national average savings rate of 0.39%.
Trim Fixed Expenses
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Unlike one-time purchases, recurring bills set the baseline for how much cash you have left. ValuePenguin data shows that more than 65% of Americans never shop around for car insurance at renewal, despite another study finding that 92% of drivers save money after switching. Trimming these fixed costs can create instant breathing room without changing daily habits.
Make Cash Earn Interest
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Cash sitting in checking accounts often earns close to 0%. Online banks now offer savings and checking accounts paying up to 4.30% APY with no monthly fees. Moving excess cash into interest-bearing accounts increases income without adding risk. This approach matters when wage growth is slowing, and prices continue to rise.
Avoid Panic Selling
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Market drops often trigger emotional selling, which historically locks in losses. Long-term market data shows stocks tend to recover after downturns. Investors who sold during past recessions and waited to reenter often paid higher prices later. Staying invested aligns with how retirement accounts are designed to grow over the course of decades.
Diversify With Real Assets
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Real estate and precious metals are commonly viewed as hedges during economic stress. Gold rose 27% in 2024, outperforming the S&P 500 by two percentage points, which grew 25%. Gold prices have climbed above $4,000 per ounce, according to recent market data. Alternative platforms now allow exposure to real estate or metals without direct ownership.
Revisit the Budget
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Inflation steadily erodes the purchasing power of a dollar. Food prices rose 3.2% over the past year and are projected to increase by an additional 2.7% in 2026. Budget frameworks like the 50/30/20 rule provide structure without the need for spreadsheets. Adjusting categories keeps spending aligned with current prices rather than outdated assumptions.
Consolidate High-Interest Debt
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Auto debt balances and delinquency rates have reached record levels. Consolidating multiple debts into one loan can lower interest rates and simplify payments. Fewer due dates reduce the risk of missed payments, which directly affects credit scores. Lower interest costs free up cash during periods of economic pressure.
Protect Credit Health
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Credit tends to matter more when the economy slows and lenders become cautious. Scores play a direct role in the rates offered on mortgages, auto loans, and other forms of credit. Even without taking on new debt, missed payments or rising balances can drag a score down. Maintaining good credit preserves options and flexibility at a time when both are especially valuable.
Add a Second Income Stream
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Side income from freelancing, gig work, or online sales has become more common as costs rise. New tax rules have reduced paperwork for casual income earners. Extra income provides a cushion when wage growth cools or hours get cut.
Delay Major Purchases
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Financing big items raises monthly obligations at a time when layoffs are becoming more common. Using sinking funds allows planned spending without new debt. Cash-backed purchases reduce reliance on credit when rates remain elevated.
Source: “AOL Money”
