Slacker’s Syllabus: Recession

imaginima/E+/Getty Images
ByTracey Anne Duncan
Vasil Dimitrov/E+/Getty Images

There are daily debates about whether or not the U.S. is or is not in a recession. Honestly, I don't even know what recession means. If everyone I know is broke, and everything is expensive, does it matter what we call it?

Think of recession as a substantial decrease in economic activity experienced broadly across the economy for a sustained period of time.

Brian Walsh, financial planner in Grand Rapids, MI

Damian Dovarganes/AP/Shutterstock

What qualifies as a recession?

When a country’s GDP is negative for two consecutive quarters (6 months), it’s a recession, Walsh says.

Practically speaking, recession means jobs are harder to find, the stock market and home sales go down, and it’s tough for people to make enough to offset inflation.

Xinhua News Agency/Xinhua News Agency/Getty Images

Recessions are painful and can be especially so for people already in a financially fragile position.

Brian Walsh, financial planner in Grand Rapids, MI

Nam Y Huh/AP/Shutterstock

Recession has a dramatic ring to it, but they actually happen all the time.

In the U.S., Walsh says, recessions have occurred every 5 years or so, depending on how far you look back. Think of them as ebbs in the economic flow.

Shutterstock
Spencer Platt/Getty Images News/Getty Images

That doesn’t mean that economic ebbs are comfortable — they aren’t — but it does mean that there are some well established ways to deal with them.

The best thing you can do right now is fall in love with your job again, commit to being the best employee you can be, and make sure you’re last on the list of people your company can afford to let go if layoffs become necessary.

Mark Henry, a financial planner in North Carolina

Shutterstock

Forget about the Great Resignation.

You want to be able to stay employed in case the job market starts to suck. Henry recommends working overtime hours at your main gig if you can. If you can't, consider taking on extra work. Recessions aren’t a good time to gamble your stability.

Giphy/@abcnetwork
Experts agree:

Folks should be saving as much as possible right now.

“If you don’t have an emergency fund (enough to cover at least 3 months of expenses), now is the time to start one,” Henry says.

Shutterstock
If you have extra cash, ironically, recessions are a great time to invest.

But, Henry emphasizes, don’t make any investments that you can’t afford to lose.

Giphy/@RoadshowPBS

Think of it as being able to buy something this year for much less than you would have bought it last year. Once we start coming out of the recession, those things you are buying on sale are going to go up and you’ll see your money increase.

Mark Henry, a financial planner in North Carolina

Richard Drury/DigitalVision/Getty Images

martin-dm/E+/Getty Images

Panicking and obsessively trying to figure out WTF is going on?

Walsh says don’t worry about the R word. Keep calm and make a realistic financial plan for how to pay the bills.

Rather than worrying about semantics and political narratives, [focus] on how to get through this very difficult economic environment. Depending on your current financial situation, you should either be limiting long-term damage or taking advantage of potential opportunities.

Brian Walsh, financial planner in Grand Rapids, MI

Shutterstock

On a larger scale, though, Henry says, “I believe it does matter what we call our current situation, and I think it’s important to recognize a recession for what it is. It matters because we track these things, and we need to be able to know where the bottom is.”

OLIVIER DOULIERY/AFP/Getty Images
In other words:

When experts do come to a conclusion about whether we’re in a recession or not, their decision will help us make choices now and plan for what is most likely to happen in the future.

Spencer Platt/Getty Images News/Getty Images
More Reading:

Maxine McCrann

Thanks for reading,
head home for more!