How to recession-proof your life amid economic uncertainty

NEW YORK (AP) — Prices for gas, food and rent are soaring. The Federal Reserve has raised interest rates to the highest level since 2018. The U.S. economy has shrunk for two straight quarters.

Economists are divided over whether a recession is looming. What's clear is that economic uncertainty isn't going away anytime soon. But there are steps you can take now to be ready for whatever is ahead.

Yiming Ma, an assistant professor at Columbia University, says it's not a question of if but when a recession will happen. People should prepare but not panic, she said.

“Historically the economy has always been going up and down," said Ma. “It’s something that just happens, it’s a bit like catching a cold.”

But, she notes, some people’s immune systems are better able to recover than others. It's the same with finances. If you think a recession could destabilize yours, here are some things you can do to prepare.

___

KNOW YOUR EXPENSES AND MAKE A BUDGET

Knowing how much you spend every month is key. Ma recommends sitting down and writing how much you spend day-to-day. This will help you see what's coming in, what's going out, and which unnecessary expenses you might be able to cut.

“By understanding what money you are getting and what you are spending, you may be able to make changes to help you through tough times,” advises the Federal Deposit Insurance Corporation’s Money Smart, a financial education program.

Budgets often reveal expenses that can be eliminated entirely or impulsive spending that can be avoided with planning.

For guidance creating a budget, free courses such as “ Creating a budget (and sticking to it) ” by CT Dollars and Sense, a partnership of Connecticut state agencies, and Nerd Wallet’s Budget Calculator...