Stop Just Worrying About the Recession and Make These 12 Money Moves Today

You can get through a recession without severe financial damage if you find good ways to manage your assets.
Last updated March 18, 2023 | By Jenny Cohen | Edited By Jeff White
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It can be scary to watch your savings take a hit during a recession, but there are things you can do to soften the blow.

So if you want to prepare for a recession, here are some ways to manage your money and weather the storm.

Create a budget

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It’s a good idea to know where you’re starting point is when you’re trying to manage your money during a recession.

You can create a budget to keep track of your spending and income as well as places where you can save more money. It’s also a good way to highlight what you’re doing right and keep you motivated when you might struggle due to a recession.

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Pay off your debts

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It’s a good idea to get debts off your balance sheet regardless of how good or bad the economy is, but it can be particularly important to not carry them into a recession.

You may want to prioritize paying off your debts that have a higher interest rate like a credit card, which could add up if you have trouble paying it off during a recession.

Pro tip: Find clever ways to pay off your debt so you can leave it behind.

Watch your investments

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During a recession, you may want to invest some of your money in more cautious investments like an index fund instead of riskier stocks. Rebalancing your portfolio could be a good way to manage the downturn with safer investments until the market rebounds.

But you also want to make stable decisions and think about the long-term implications. You don’t want to be on the sidelines if the market rebounds and you’re not invested in the upswing.

Build up your emergency fund

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Something you should already have is an emergency fund, and that’s even more important during an economic downturn.

You should consider having three to six months’ worth of expenses covered with an emergency fund in case you find yourself out of work due to a layoff or you have a medical issue and need that extra cash to get you through.

It can also be used for emergency costs such as a surprising home repair or a car accident.

Cut back on expenses

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Cutting back on your expenses may be harder to actually do than it sounds, but there are ways to make small clips or major cuts work for you.

Look at your budget and identify recurring monthly expenses that you may be able to cut such as streaming services or subscriptions. You also may want to get rid of big-ticket items like expensive clothes shopping or eating out on a regular basis.

Buy in bulk

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It may be a small expense to get a membership to a warehouse retailer like Costco or Sam’s Club, but it could pay off for you during a recession.

A great Costco hack is to buy in bulk, which may be more expensive up-front but could save you money on a per-unit cost.

Cut out restaurant spending

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One expense that could add up without you realizing it is buying food at restaurants, either in person or through delivery services like DoorDash or Grubhub.

Look over your budget and figure out how much more it costs to eat dinner out somewhere instead of eating at home. Even something as simple as cooking at home could save you some extra cash.

Use a high-yield savings account

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If you’ve been able to save some money, you can make sure that money is working for you in a high-yield savings account.

Check with your local bank or financial institution to find out what kind of options you have for your savings. They can move some of your money into a high-yield account that can help you earn extra cash while it sits there collecting interest.

Pro tip: Check out our list of the best savings accounts.

Delay your retirement

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This may be a tough one to accept, but delaying your retirement could help you get through a tough recession.

You could continue to earn an income to help you with bills and other expenses. And delaying when you start to get your Social Security could help you boost your monthly checks later on.

Add to your 401(k) retirement savings

You may think you want to withhold putting more money in your 401(k) during a downturn, but a recession may be a good time for you to stay the course.

Contributing to your 401(k) will allow you to add money for stocks when they cost less due to the market downturn, allowing you to make extra money when the stock prices go back up.

Plus, maxing out your employer contributions will help you invest extra cash that can work for you when the recession is over.

Start a side hustle

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Do you have a hobby that you could make some money with or want to fill a few extra hours with something to earn you cash? A side hustle may be a good way for you to do that.

Think about talents you may have or areas of interest where you may be an expert and find ways to make them work to your advantage and earn extra money.

And it also may be a good idea to work on ideas that may require less investment to get started like tutoring or becoming a virtual assistant to help you save money.

Focus on long-term goals

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Recessions may seem to drag on and on when you’re in the middle of one, but there’s an upturn after the downturn.

Instead of worrying about the immediate hit you may take financially, think about your long-term goals and make sure you account for them when deciding what to do financially.

Staying true to your long-term path may help you endure short-term declines.

Reduce your utilities

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One of the biggest fixed costs you may have in your budget is the cost of things like utilities. You may want to think about turning the furnace temperature down a little or waiting to turn the A/C on during the summer to save some extra cash on gas or electricity costs.

Consider ways to cut back on your cable and internet expenses, such as cutting the cord on cable or paying for slower-speed internet access that doesn’t compromise your work from home.

Remember your health beginners yoga class

There are some things you should still spend money on, including your health.

Set aside money to pay for doctor visits or gym memberships to keep you in shape. It’s also a good idea to spend cash if your mental health is struggling because of the stress of a recession.

Check with your employer to see if it has a wellness program that may help you save on a gym membership or other health-related items.

Skip those big-ticket items

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You may be ready to start booking a big vacation or buying a new car, but it might be a good idea to hold off on those big-ticket items if you can.

There are ways you can still spend money on those items, but just not as much. You can buy a used car instead of a new one, for example, to take a vacation closer to home rather than the big trip you were planning.

Bottom line

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Remember to keep an eye on the economy and watch for potential signs that a recession could be coming. That way you can adjust your investments or crush your debt to get through the hardest part of a potential recession.

It’s also a good idea to take stock of your investments on a regular basis so you know how much you have and how to make changes if you need to.

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Author Details

Jenny Cohen Jenny Cohen is a freelance writer who has covered a bit of everything, from finance to sports to her favorite TV shows. Her work has been featured in The Wall Street Journal, USA Today, and