SAN DIEGO — As concerns about a potential recession grow, financial experts are offering advice to Americans on how to manage their finances during these uncertain economic times. Despite the current absence of a recession, the risk is increasing, prompting individuals across generations to reassess their financial strategies.
“With everything going on in the news today, the recession probability has certainly been elevated, and we have clients and others coming to us concerned about what may happen next,” Justin Kuntz, managing director of Pacific Wealth Management said.
For younger generations, job security remains a primary concern, while Millennials and Gen Xers are reconsidering their retirement plans.
“You have to take care of yourself, keep healthy, keep working, change plans maybe,” David Santiago, 55, said.
Financial experts recommend several key strategies to prepare for potential economic downturns:
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Budgeting: Maintaining a strict budget is crucial, as exemplified by Santiago’s approach.
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Debt management.
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Diversification: A diversified portfolio with investments in the stock market, areas of the bond market, cash, and real estate.”
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Cash flow management.
With 76% of Americans reporting that their income is not keeping up with inflation, according to a CBS News poll, experts recommend closely monitoring cash flow.
“Certainly, if they have high-interest debt and they have the savings available, try to pay some of that down,” Hisham Foad, an associate professor in economics at San Diego State University said. He said his biggest concern is for senior citizens.
“Seniors and retirees face unique challenges, this is a group that, given their fixed income, is going to be affected the most by inflation as prices go up,” Foad said. “That really reduces their real income, their real purchasing power, and so I wish I had a good bit of advice for such a group.”
Despite these concerns, some experts remain cautiously optimistic.
“Obviously anything can happen. But for now, it looks okay,” said Kuntz, citing low unemployment rates and steady stock market performance.
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