How to Recession Proof Your Life

Harvard Business published an article a while ago that talked about job security and how the younger generation question if their job is secure. No matter how old you are, there is one thing that is certain – gone are the days that we leave school and work at the same career throughout our lifetime.  Well, there may be a handful of people such as doctors that may remain in the same career, but still, the vast majority of us will ultimately have two or three careers.  One thing to always keep in the back of the mind is what if you are in the midst of changing careers and a recession hits?  Or even if you are in a pretty good position but the company you work for takes a hit if another recession occurs?  Recession proofing your life should be just as much a priority as having life insurance to take care of your family.

There are some steps you can take to recession proof your life and depending on your financial situation, it may not be too difficult.

The first question to ask yourself is how much cash do you have saved for a rainy day? Our grandparents (and depending on your age, our parents) never bought anything unless they had the cash to do so.  When they told us to save for a rainy day those were very wise words.  Do you have three to six months of your monthly income tucked away (or perhaps even 8-12 months of expenses if your industry is slow to hire these days)? If not then this is a goal you need to establish and work aggressively towards.  Cutting back on the simplest of things such as that daily coffee at the coffee shop will add up over time.  Every dime counts in a weakened economy.

Next step on the ladder to recession proofing your life is to spend less money. Eliminating or delaying any unnecessary purchases will help you to save.  Take that saved money and put it away with your savings.  Oh, sure it’s real nice when there is a sale on tools or clothing – but always ask “Do I really need it?

Although this next step is close to the previous one, there is a slight difference.  Be a smart shopper. When you know there is something you will need start checking out the sales flyers.  More often than not the no name brand is just as good as the name brand so switching to no name is good advice.  Never spend more than you need.  If you want that three to six month cushion, then this is a must.

Stockpile goods when they are on sale. When the items you buy regularly at the grocery store are on sale, and that sale is a great deal, then stock up.  Don’t just stock up on food items, personal care items and toiletries as well are often on sale at great prices – take advantage of these sales.

Stack of MoneyThe next step is something we all hear more and more frequently these days – pay down your debtDebt can be like a black cloud looming over your life.  There are many options to help such as consolidation, refinance and other options.  Make no mistake though, get your debt down and get it to a point in which it is eliminated or at the very least manageable.

How about making do with what you have? Use leftovers and if you have run out of something then be creative and find a substitute.  Shop at second hand stores.  There are unbelievable deals to be had and it’s great for the environment.

Make things last. How many times have you tossed out the ketchup because you can’t squeeze any more out?  Cut the container in half and you’ll discover there is still much more in there you can use.

Do you have air conditioning? Can you live without it?  If no one in your home suffers from respiratory ailments then do without.  The money saved on air will surely look better in your savings account than in the utility’s account.  In winter, turn that thermostat down a couple of degrees and wear a sweater.

If work is to be done on the home, don’t hire out. The Internet has is a wealth of learning material and doing things yourself can save you hundreds of dollars. [Though know when you really can’t do a job.  Getting in over your head can end up costing you more.]

Make yourself invaluable to your company.  Now is the time to show your boss that you are needed.  Be your boss’ go-to person.  This way you aren’t on the chopping block come layoff time.  Even if the company still has to let you go you will have the weight of a great recommendation behind you when looking for a new job.

Let’s recap these step to recession-proof your life:

  • Have an emergency fund;
  • Spend less;
  • Shop smart;
  • Stockpile sale items when possible;
  • Pay down your debt;
  • Make do with what you have;
  • Make things last;
  • Cut down on energy consumption;
  • Learn to DIY; and
  • Make yourself invaluable at work.

Recession proofing is essential and depending on your current financial situation, some or all of these steps may help you to stash cash away for a rainy day!

What do you think are some other steps to recession-proof your life?

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Published or updated October 23, 2013.


  1. You know, it all boils down to living within your means and saving the excess cash that you have in order to weather the storms of life. It could be a recession, a medical condition, or some other reason that income gets changed suddenly. The bottom line is you have to be able to adjust to whatever life throws at you.

    • You’re right. It really shouldn’t matter if there’s another recession coming or not. You need to have all your ducks in row no matter what the economy is. But I think with the way unemployment has been the past couple of years it’s especially important to take notice of you finances and prepare “just in case.”

  2. A thumbs up for learning to DIY! There’s a wealth of information on the internet. Don’t like to read? There is a video for that! Especially on home improvement, you can save some serious money doing simple electrical and plumbing work.

    I’d also add, have a side hustle (or two!). May not replace your income from your 9-5, but could serve as a nice cushion.

    Excellent points Glen!

    • You have to be careful with DIY. There are some jobs with electrical or plumbing that I just won’t touch but I know with some time and reading I can learn to do most other things. On a simple plumbing note, I just recently replaced a busted spigot outside the house by the lawn. I was ready to call in a pro but opted instead to give it a shot myself. A little elbow work and a few bucks and it works perfectly!

  3. How about: Be Prepared. Organize your personal finances so you are prepared for whatever comes your way.

    • Ahh, the ole Boy Scout motto never ceases to be useful in life. You’re right, we need to have our finances set up in a way that we are prepared for what’s thrown at us. It’s not always easy but we need to have a plan.

  4. I like how you mentioned 8 to 12 months instead of 3 to 6 months for emergency funds. I strongly advocate the 8 to 12 month time frame these days, as it’s more realistic for this economy. 3 months is just not enough in 2011.

    Good post!

    • People are just not getting re-hired quickly these days. 8-12 months is a lot of emergency cushion, but it will come in handy if you find yourself without a job in a tough economy.

  5. Great post! I think people should generally look at vehicles, ie downsize to more economical versions, save money on gas and repairs. DIY goes a long way when working on your car as well, and manuals make this easier.

    • You certainly need to look long-term if you are buying a car. You need to ask the what-if’s like “what if gas prices go up by $1 or more” or “what will it cost to repair, maintain, and insure the car?”

      Some things are tough to DIY on cars these days but there are still places you can save.

  6. Harri @ TotallyMoney says:

    As Seth Godin points out in his book Lynchpin: Are you Indispensible (definitely worth a read by the way), making yourself integral to an organisation by being unique, innovative and willing to tackle the unfamiliar is essential if you are to weather a barrage of cutbacks and redundancies.

    I’d completely agree that having an emergency fund and putting in the elbow grease to cut down on house maintenance costs are also so key to braving yourself for rainy days.

    • I think you can’t afford to be a robot when you work for a company. You have to keep asking questions about how things work and why. You need to show initiative.

      Lynchpin, and many of Godin’s other book, are all on my list to read!


  8. I agree with Evan, we need multiple streams of income and the best way to be able to get these streams of income is to live very below your income. My goal is to live on 60% of my income and have enough income from multiple sources that loosing my job will not harm me. Granted my extra streams only cover 15% of my expenses now and I am living on 70% of my income but as time passes I get closer and closer to my goal.

    • It all starts somewhere. But at least you now if something should happen to your primary job that you have some income to help you get by.

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