COVID-19 has changed our way of life and it needs to change the way we look at our money.

With the economy moving towards a recession, you need to be in the best possible position.

How do you do that?

Establish an emergency fund.

Having emergency cash means benign prepared if your income drops in a recession since you’ll be have money to cover the bills.

Ideally, you should have enough in a high-yield savings account to cover three to six months of living expenses.

Since it can take longer to find a new job in a recession, having a hefty emergency savings account can ensure you’re able to cover your costs if you’re laid off and it takes awhile to find work.

Pay off high-interest debt.

Debt is a major financial burden. Repayment or discharge is a top way to prepare for economic trouble.

Paying off debt means one less obligation to worry about if your income is cut during a recession.

You’ll also be able to redirect the money that was going toward interest to saving or investing once your debt is gone.

Reflect on your lifestyle and priorities.

Careful review of how we spend and how we save will allow us to be better prepared.

By reviewing where your money is going and what your financial priorities are, you can make sure you’re using your money as wisely as possible.

You can also find spending cuts so you have more to save for emergencies or use to pay down debt, enabling you to check off other items on this list.

We learned during pandemic lock-down, Americans are able to save.

Review your investment portfolio and make sure it matches your risk tolerance.

Investing during a recession is often smart since there can be great buying opportunities during economic downturns. But it’s important to recognize the risk of putting money into a volatile market.

One of the key components of this review involves making sure you have the right asset allocation for your age.

If you’re getting close to retirement and may need to start drawing from your investment accounts soon, you don’t want to have too much money in stocks since you can’t wait out any downturns.