This post may contain affiliate links. Please read my disclosure for more information.

Whether or not we are in a recession is difficult to determine. While the majority of analysts believe one is inevitable and is already upon us, some believe we are already in one. All we know is that product prices have increased and will continue to do so.

You know what a recession is?

The textbooks define a recession as an economic decline for a period of time. According to Economists, two things need to happen. First, there should be two consecutive quarters of economic decline in gross domestic product (GDP). Second, there should be an increase in the unemployment sector.

Whether you relied on government assistance or had a job two years ago, when we were at the economic peak in February 2020, you were able to stretch your money to some extent. With the historical interest rates set by the Fed, which have risen by 0.75 percentage points since 1994, you’ll need more money to purchase the same thing. If the product has not increased relative to the market, know that you’re getting less for the same price.

The impact is felt everywhere. If you have a family, you’ll feel the effects more quickly in so many ways. When we moved to our new apartment in 2020, right before the pandemic was officially announced, our grocery shopping budget for the month was $500.

When grocery shopping, the wife’s routine is to first visit wholesale stores like Bj’s and Costco, then pick up the other details in the surrounding supermarket. She’s a master at finding bargains. We always try to take advantage as long as it fits within the budget.

As the kids get older, our food budget grows as well. We haven’t changed our diet in terms of the products we purchase. Our budget is now close to $750 a month, which is still under the USDA’s budget-conscious family food plan average.

How long does a recession typically last?

A recession’s arrival and potential duration are impossible to forecast.

According to the National Bureau of Economic Research (NBER) more than thirty recessions that have been recorded throughout history. Each of these recessions was brought on by a unique set of events, including, but not limited to, the Dotcom bubble in 2001, the Gulf War in 1990–1991 and the Great Recession in 2007–2009.

The Great Recession (December 2007 to June 2009) had the longest duration, while the coronavirus’s two-month recession from March 2020 to April 2020 had the shortest.

Here’s an average period for how long a recession lasts:

In the event of a recession, what should I do?

Keep your cool first. If you already have a plan in place during the current bear market, you can readjust your strategy when the recession hits. Naturally, a variety of factors, such as your time frame, your goals, and whether or not you still have a job, will be taken into account. Your retirement portfolio will decrease. Don’t panic and take your money and accept the losses.

Don’t wait for a job to come along before you start hunting if you don’t have one. I’ll advise you to look for one now, while many companies are hiring. However, if you are currently employed, the following is how you should get ready:

Increase your emergency savings. Pay yourself first, especially in such an event. It may sound reasonable to lay aside money for three to six months, but when the storm arrives, it might all be gone in a flash. Try gradually reallocating more into savings until the storm passes.

Pay down your debt. Debt is debt, as I am aware. Having a high-interest credit card balance, however, generally feels like a burden. It has the ability to hold you and your family hostage if you don’t take action. It is much worse if you suffer an income loss.

Utilize government and community assistance programs. Fortunately, we reside in a nation where, even in times of need, the government will offer some form of relief. Aid will be available, even if it isn’t always accessible to everyone. Also, consult your local church to see whether they ever distribute perishable food items that the public and distant members have provided.

Forget the stock market. Take full advantage of the downtrend if you are not unemployed, are able to maintain your investment strategy, and are investing for the long haul. Don’t go overboard; only invest what you can afford; keep in mind that we’re in a recession. Go with any low-cost index funds or exchange-traded funds (ETFs) get expose to the entire U.S stock market rather than “meme stocks” because they will play with your emotions. Doing so will

On the other hand, if you’re unemployed or believe you’ll be laid off, stop investing and increase your cash reserves.

If your workplace offers a retirement portfolio, only invest up to the matching contribution. Otherwise, save your money. No matter what, avoid cashing out.

All things considered,

Everybody’s circumstances are unique.

When a recession hits, you ought to be able to implement it with the correct plan. Recessions, which are common, are always followed by a stock market recovery.

**Valuable Resources I Use Daily:

Empower offers a free account to assist you in managing your net worth and investment portfolio. Your asset allocation and portfolio performance are so obvious and easy to grasp that I can't get enough of them. It's an excellent tool for anyone keeping track of their investments.

Robinhood is a platform that does not charge commissions. You can start investing with as little as $1 in stocks, ETFs, and REITs. It's simple to operate and navigate. Sign up now to receive a free stock.