How to recession-proof your life amid economic uncertainty

NEW YORK (AP) — Prices for gas, food and rent are soaring. The Federal Reserve has raised interest rates to the highest level since 2018. The U.S. economy has shrunk for two straight quarters.

Economists are divided over whether a recession is looming. What’s clear is that economic uncertainty isn’t going away anytime soon. But there are steps you can take now to be ready for whatever is ahead.

Yiming Ma, an assistant professor at Columbia University, says it’s not a question of if but when a recession will happen. People should prepare but not panic, she said.

If you think a recession could destabilize your finances, here are some things you can do to prepare.

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KNOW YOUR EXPENSES AND MAKE A BUDGET

Knowing how much you spend every month is key. Ma recommends sitting down and writing how much you spend day-to-day. This will help you see what’s coming in, what’s going out, and which unnecessary expenses you might be able to cut.

Budgets often reveal expenses that can be eliminated entirely or impulsive spending that can be avoided with planning.

For guidance creating a budget, free courses such as “Creating a budget (and sticking to it)” by CT Dollars and Sense, a partnership of Connecticut state agencies, and Nerd Wallet’s Budget Calculator can be good places to start.

SAVE AS YOU CAN

The more non-essential expenses you can cut, the more you can save.

Programs such as America Saves, a non-profit campaign by the Consumer Federation of America, can help create a roadmap.

And if you have a savings account, it’s important to check whether your bank gives you a good interest rate and shop around if it doesn’t, Ma said.

CONSOLIDATE YOUR LOANS, AND DON’T TAKE ANY MORE

As interest rates rise, experts recommend that you...