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How to financially prepare for a recession

Here are some tips to help protect your finances through a recession.

A recent poll by Bankrate found that 52% of economists believe a recession will happen in the next 12 to 18 months.

With that in mind, here are some tips to help protect your finances.

Revise your budget

Bankrate suggests looking at all your expenses and reducing costs anywhere you can. The idea is to free up as much cash as possible. Don’t forget to cancel unnecessary expenses like streaming services, meal prep boxes, and clothing deliveries.

Build an emergency fund 

Do you best to save 4-6 months of living expenses. Having that cushion will help you avoid financial anxiety.

Reduce consumer debt

Work at paying off credit cards now. Most credit cards have variable interest rates. If a recession happens, your rate will likely increase and that debt will be even more expensive.

Maintain or increase your credit score 

Payment history and credit utilization make up 65% of your FICO score. Keep spending under 25% of that credit limit and try to pay off the balance each month.

You can find more tips on Bankrate's website.

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