Yahoo Finance The 3 most important things to do if you’re worried about a recession
While the Australian share market has taken steps towards recovery this week, the month-long downturn in stocks both globally and locally has sparked recession fears.
Also read: 5 places to put your money when share markets tank
Also read: Australian economic growth weak as GFC days
Also read: Aussies will be hit by US-China trade war, warns Peter Costello
And, though industry experts are remaining broadly optimistic for the Aussie economy, some of you might still be terrified your financial world will soon crumble.
If that’s the case, financial advisor James Gerrard told Yahoo Finance there are a few ways you can prepare for financial doomsday.
Try and save cash
Gerrard said if bad times were to hit Australia, having more cash under your belt will put you in a better position to weather the storm.
“A couple of [my] clients have sold their houses, because they’re scared that with a recession, house prices would crash, so they’re renting and they're sitting on cash.”
The best way to get the most cash in your bank is to be disciplined about it, Gerrard said.
“Just by doing a little bit, every pay, savings can really build up over time,” Gerrard said.
“If you can commit to saving a few hundred dollars a month to start, that ends up being thousands of dollars, even in the first year.”
“It's just about that mindset and just putting money every month into a high interest bank account.”
Pay down your debts
“People in their 20s and 30s have never seen a recession in Australia, so they don't know what it's like to have conditions where the unemployment rate goes up, your wages don't go up, and it's hard to get a new job,” Gerrard said.
“So if people are worried about a recession, the logical thing to do would be to pay down as much debt as you can.”
Invest in gold
Gold is traditionally perceived as lower risk than shares and property, meaning it could be a place to put your cash when share markets tank.
“Traditionally, where we have bad economic times, the value of gold goes up, because people are trying to cling to something of value in these difficult times,” Gerrard said.
And Gerrard said even now, on days where US President Donald Trump has tweeted things that rock the share market, the price of gold has spiked.
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