It’s not easy to predict when a recession will hit, but there are things you can do to make sure you weather it well if and when it arrives.
One key move is to rein in your extra spending and put big purchases on the back burner until the economic outlook is better.
Here are some of the worst purchases you can make in an economic downturn. Prepare yourself financially and consider how a recession might affect your spending plans.
If you’re over 50, take advantage of massive discounts and financial resources
Over 50? Join AARP today — because if you’re not a member you could be missing out on huge perks. When you start your membership today, you can get discounts on things like travel, meal deliveries, eyeglasses, prescriptions that aren’t covered by insurance and more.
How to become a member today:
- Go here, select your free gift, and click “Join Today”
- Create your account (important!) by answering a few simple questions
- Start enjoying your discounts and perks!
Important: Start your membership by creating an account here and filling in all of the information (Do not skip this step!) Doing so will allow you to take up 25% off your AARP membership, making it just $12 per year with auto-renewal.
A new house
If you're saving money for a down payment and looking to move to a different area, a recession might make you rethink your plans.
Before you take the plunge, consider whether your job is recession-proof or if you have enough money to cover a down payment and other expenses without raiding your emergency fund.
A recession might make it easier to score a bargain on a home, but factor in how a downturn could affect other parts of your budget before you buy.
A new car
Getting a new car is another big-ticket purchase you might want to postpone.
Sometimes, buying a vehicle might be necessary. But if you can wait, hold off on buying a new one and build your savings instead. If the economy hits the skids and you lose your job, you don’t want to be saddled with a car loan payment.
Expensive vacation packages
We all need the occasional vacation, but consider how much you would likely spend on an expensive vacation package. Is that really wise during a recession?
Instead, consider a local, affordable trip and put the extra cash you don’t spend in an emergency fund. That way, you will have some extra money available if you need it.
Resolve $10,000 or more of your debt
Credit card debt is suffocating. It constantly weighs on your mind and controls every choice you make. You can end up emotionally and even physically drained from it. And even though you make regular payments, it feels like you can never make any progress because of the interest.
National Debt Relief could help you resolve your credit card debt with an affordable plan that works for you. Just tell them your situation, then find out your debt relief options.1
How to get National Debt Relief to help you resolve your debt: Sign up for a free debt assessment here. (Do not skip this step!) By signing up for a free assessment, National Debt Relief can assist you in settling your debt, but only if you schedule the assessment.
Extras at the grocery store
It can be fun to grab some impulse purchases at the grocery store, even if they are a bit pricier than what you would typically buy.
But grocery store extras can add up, especially during a recession. That can hurt your budget and make it more difficult to afford other necessities.
Think about going to the grocery store with a list and stick to it in order to keep costs down. If you still want to pick up some impulse buys, consider nonperishable foods that might be on sale so you can stock up your pantry.
Name-brand clothes
It’s a good idea to freshen up your closet from time to time, especially if you need professional clothes for the office.
However, try to stick to more affordable options instead of name brands when you shop during a recession. Or, consider stores discount retailers such as T.J. Maxx or Burlington, where you can find name brands for affordable prices.
Trending Stories
A vacation home
A vacation home can be a good investment. It might even make you money if you advertise it through websites such as Airbnb.
However, these properties can cost you fees, closing costs, and other expenses that could surprise you. Surprise costs are never welcome during a recession.
Items that require financing
Sometimes, you might need to apply for financing to purchase a particular item. Perhaps you want to update furniture for a room in your home, or you need to finance the purchase of a computer for personal use.
Think about how much you want the item compared to how much you need it and adjust your purchase plans from there. Perhaps you can hold off on actually purchasing something and save money for it so you are in a better financial position to buy it later.
Memberships and subscriptions
Costs can add up fast if you have monthly subscriptions and memberships for things like the gym or streaming services. And don’t overlook subscriptions for beauty products and books.
Review your monthly subscriptions and find ways to cut back or eliminate them. Little bits can add up to big savings.
A recession is also a time for you to hold off on starting a new subscription until you are in a better financial position.
Home renovations that can wait
Home renovations often end up being more expensive than you originally thought, so avoid renovations during a recession unless they are necessary.
Instead, try to save money and perhaps build up your emergency fund. That way, you will at least have cash on hand if you need it for a major emergency repair.
Earn cash back on everyday purchases with this rare account
Want to earn cash back on your everyday purchases without using a credit card? With the Discover®️ Cashback Debit Checking account (member FDIC), you can earn 1% cash back on up to $3,000 in debit card purchases each month!2
With no credit check to apply and no monthly fees to worry about, you can earn nearly passive income on purchases you’re making anyway — up to an extra $360 a year!
This rare checking account has other great perks too, like access to your paycheck up to 2 days early with Early Pay, no minimum deposit or monthly balance requirements, over 60K fee-free ATMs, and the ability to add cash to your account at Walmart stores nationwide.
Don’t leave money on the table — it only takes minutes to apply and it won’t impact your credit score.
A bigger TV or fancier laptop
Electronics can be an expensive purchase, and they are usually a “want” and not a “need.” So, skip them during a recession.
Think about saving that money instead so you will have extra cash to buy electronics when the economy starts to turn around. That way, you won’t have to get out of debt during or after the recession.
Bottom line
Regardless of whether the economy is doing well or is in a recession, it’s always a good idea to check up on your financial health so you know where you are succeeding and where you need to do more work.
It’s also a good idea to review your finances regularly so you are prepared in case there is a downturn in the economy. Preparation can help you get through a recession without having to bust your budget.
Lucrative, Flat-Rate Cash Rewards
FinanceBuzz writers and editors score cards based on a number of objective features as well as our expert editorial assessment. Our partners do not influence how we rate products.
Wells Fargo Active Cash® Card
Current Offer
$200 cash rewards bonus after spending $500 in purchases in the first 3 months
Annual Fee
$0
Rewards Rate
Earn unlimited 2% cash rewards on purchases
Benefits
- Low spend threshold for its welcome offer — $200 cash rewards bonus after spending $500 in purchases in the first 3 months
- Cell phone protection benefit (subject to a $25 deductible)
- Can redeem rewards at an ATM for literal cash
Drawbacks
- Foreign transaction fee of 3%
- No bonus categories
- Select “Apply Now” to take advantage of this specific offer and learn more about product features, terms and conditions.
- Earn a $200 cash rewards bonus after spending $500 in purchases in the first 3 months.
- Earn unlimited 2% cash rewards on purchases.
- 0% intro APR for 12 months from account opening on purchases and qualifying balance transfers. 19.74%, 24.74%, or 29.74% Variable APR thereafter; balance transfers made within 120 days qualify for the intro rate and fee of 3% then a BT fee of up to 5%, min: $5.
- $0 annual fee.
- No categories to track or remember and cash rewards don’t expire as long as your account remains open.
- Find tickets to top sports and entertainment events, book travel, make dinner reservations and more with your complimentary 24/7 Visa Signature® Concierge.
- Up to $600 of cell phone protection against damage or theft. Subject to a $25 deductible.
Subscribe Today
Want extra-cash moves to come right to you?
Stop browsing endlessly. Get proven ways to earn pocket money, help cover rent, and crush your debt — sent to your inbox daily.