4 ways to navigate a double-dip recession

Financial pundits debate whether the economy is headed for a double-dip recession. Another downturn is far from certain, but it's worth at least thinking through a few ways of coping with such a scenario.

4 ways to react to a double dip

Here's what to do if the economy gets worse before it gets better:

1. Be nice to your boss a while longer. If the economic recovery fails to take hold, a leading reason will be because employment never regained its strength. Despite all the billions in government stimulus, the economy has so far replaced only a fraction of the jobs that were lost in the recession. In other words, jobs remain precious--so be sure to treat yours that way.
2. Stay current on money market rates. Why money market rates? Because money market accounts are more flexible than CDs, and money market rates are typically higher than savings account rates. In other words, a money market account is a good place to park money if you want to pull out of riskier investments for a while--or if you have an emergency fund that you might need to access if the recession returns.
3. Prepare your household. Those temporary measures may now be the new reality. When the economy is tight, people are forced to rediscover good financial habits--belts are tightened, debt is paid down and personal savings rates rise. The macroeconomic message behind a double-dip recession might well be that America's financial habits were just too risky for too long. From a microeconomic standpoint, this might mean that everyone in your household must continue to make sacrifices in order to live within means.
4. Look for rare opportunities. From real estate to stocks to automobiles, a double-dip recession could create some truly rare bargains. If you are in a position to take advantage of them, don't hesitate. You'll get a great deal, and you'll be doing your bit to jump-start the economy.

Showing 0 comments | Add your comment