Recession or Depression? Safeguard Your Finances in Uncertain Times

A client shared an interesting quip this week: “If my neighbor loses his job, it is a recession; if I lose my job, it is a depression.” These days, it is hard to avoid talk of the looming recession, with companies announcing layoffs every day. Job uncertainty can be highly stressful.

One simple way to ensure that a job loss doesn’t become a financial depression for you, and to reduce your anxiety, is to have at least 3-6 months' worth of expenses in a liquid account. This safety net can sustain you in case you do lose your job, as it typically takes this long to find another job. Having this financial cushion will reduce your anxiety about an impending layoff and position you to negotiate for your next job from a position of strength.

So this holiday season, before you spend on everyone else, invest in your mental health by giving yourself the gift of a financial cushion.