5 Ways to Protect Your Money From a Recession

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You’ve heard the warnings: inflation, stagflation, Trumpflation — all the “-flations” the news loves to hype. And for years, economists have been warning of a recession that still hasn’t arrived.Alert: highest cash back card we’ve seen now has 0% intro APR into 2026
This credit card is not just good – it’s so exceptional that our experts use it personally. It features a 0% intro APR for 15 months, a cash back rate of up to 5%, and all somehow for no annual fee!
Click here to read our full review for free and apply in just 2 minutes. Will it even happen? Honestly, no one can predict for certain.I don’t know about you, but I’m not gonna sit around waiting for bad times to hit before scrambling. I’d rather prepare my money now while things are calm.Here are five smart moves to recession-proof your finances, before a storm hits.1. Build an emergency buffer (even a small one helps)Cash is king during a recession. A recent study from Vanguard found that even a small emergency fund — just $2,000 — can boost financial wellbeing by more than 20%.That said, if you can save even more you should. Most experts (and I agree) recommend having three to six months’ worth of expenses on hand. And with the backing of FDIC insurance, your savings are protected up to $250,000 per bank, per depositor in the event of bank failure.This week: Open one of the top high-yield savings accounts and automate $50 a week into it. That first $2,000 might matter more than you think.2. Lock in high CD rates nowIf a recession hits, the Federal Reserve typically slashes interest rates. This means we’ll be saying bye-bye to the awesome yields we’ve had for savings accounts lately.If you’ve got extra cash, it’s not a bad idea to lock in rates with a short-term certificate of deposit (CD).Right now 6- to 12-month CDs are offering around 4.00% APY. This gives you a guaranteed return, even if rates tank later this year. And like high-yield savings accounts, CDs come with FDIC protection.Compare the best CDs available today, and lock in your return before rates lower any further.3. Create a “bare-bones” budgetHope for the best, but prepare for the worst. A bare-bones budget is your back-up spending plan if all hell breaks loose. It only includes essential things, like housing, groceries, and basics you need to live on.Just knowing your minimum spend is really powerful. If and when the time comes for you to cut back, you’ll already be prepared and know exactly how far you can stretch your dollars.4. Pay down high-interest debt ASAPRecessions often come with job losses or reduced income. And high-interest credit card debt only adds more fuel to the fire.If you’re carrying credit card balances month to month, make it a top priority to pay them off.Even better — see if you qualify for a 0% APR credit card and transfer your balance over. The cards on our list can give you up to 21 months with no interest, buying you time to catch up.5. Diversify your investmentsA recession often hits the stock market hard. But not every part of the market reacts the same way.Diversification means spreading your investments across different types of assets. It can soften the blow in market downturns, while keeping your money growing long term.If you’re worried or confused about how your money is invested, it can be really helpful to connect with an advisor.A short questionnaire from our partner, SmartAsset, helps match you with up to three fiduciary financial advisors, each legally bound to work in your best interest.Final thoughtsDon’t try and predict where the economy is headed. Just prepare your finances regardless.Even one move today — like opening a high-yield savings account or shifting your portfolio — can make a big difference in a downturn.Alert: highest cash back card we’ve seen now has 0% intro APR into 2026
This credit card is not just good – it’s so exceptional that our experts use it personally. It features a 0% intro APR for 15 months, a cash back rate of up to 5%, and all somehow for no annual fee!
Click here to read our full review for free and apply in just 2 minutes. We’re firm believers in the Golden Rule, which is why editorial opinions are ours alone and have not been previously reviewed, approved, or endorsed by included advertisers.
Motley Fool Money does not cover all offers on the market. Editorial content from Motley Fool Money is separate from The Motley Fool editorial content and is created by a different analyst team.Joel O’Leary has no position in any of the stocks mentioned. The Motley Fool recommends Barclays Plc. The Motley Fool has a disclosure policy.”}]] [[{“value”:”

You’ve heard the warnings: inflation, stagflation, Trumpflation — all the “-flations” the news loves to hype. And for years, economists have been warning of a recession that still hasn’t arrived.

Alert: highest cash back card we’ve seen now has 0% intro APR into 2026

This credit card is not just good – it’s so exceptional that our experts use it personally. It features a 0% intro APR for 15 months, a cash back rate of up to 5%, and all somehow for no annual fee!

Click here to read our full review for free and apply in just 2 minutes.

Will it even happen? Honestly, no one can predict for certain.

I don’t know about you, but I’m not gonna sit around waiting for bad times to hit before scrambling. I’d rather prepare my money now while things are calm.

Here are five smart moves to recession-proof your finances, before a storm hits.

1. Build an emergency buffer (even a small one helps)

Cash is king during a recession. A recent study from Vanguard found that even a small emergency fund — just $2,000 — can boost financial wellbeing by more than 20%.

That said, if you can save even more you should. Most experts (and I agree) recommend having three to six months’ worth of expenses on hand. And with the backing of FDIC insurance, your savings are protected up to $250,000 per bank, per depositor in the event of bank failure.

2. Lock in high CD rates now

If a recession hits, the Federal Reserve typically slashes interest rates. This means we’ll be saying bye-bye to the awesome yields we’ve had for savings accounts lately.

If you’ve got extra cash, it’s not a bad idea to lock in rates with a short-term certificate of deposit (CD).

Right now 6- to 12-month CDs are offering around 4.00% APY. This gives you a guaranteed return, even if rates tank later this year. And like high-yield savings accounts, CDs come with FDIC protection.

Compare the best CDs available today, and lock in your return before rates lower any further.

3. Create a “bare-bones” budget

Hope for the best, but prepare for the worst. A bare-bones budget is your back-up spending plan if all hell breaks loose. It only includes essential things, like housing, groceries, and basics you need to live on.

Just knowing your minimum spend is really powerful. If and when the time comes for you to cut back, you’ll already be prepared and know exactly how far you can stretch your dollars.

4. Pay down high-interest debt ASAP

Recessions often come with job losses or reduced income. And high-interest credit card debt only adds more fuel to the fire.

If you’re carrying credit card balances month to month, make it a top priority to pay them off.

Even better — see if you qualify for a 0% APR credit card and transfer your balance over. The cards on our list can give you up to 21 months with no interest, buying you time to catch up.

5. Diversify your investments

A recession often hits the stock market hard. But not every part of the market reacts the same way.

Diversification means spreading your investments across different types of assets. It can soften the blow in market downturns, while keeping your money growing long term.

If you’re worried or confused about how your money is invested, it can be really helpful to connect with an advisor.

A short questionnaire from our partner, SmartAsset, helps match you with up to three fiduciary financial advisors, each legally bound to work in your best interest.

Final thoughts

Don’t try and predict where the economy is headed. Just prepare your finances regardless.

Even one move today — like opening a high-yield savings account or shifting your portfolio — can make a big difference in a downturn.

Alert: highest cash back card we’ve seen now has 0% intro APR into 2026

This credit card is not just good – it’s so exceptional that our experts use it personally. It features a 0% intro APR for 15 months, a cash back rate of up to 5%, and all somehow for no annual fee!

Click here to read our full review for free and apply in just 2 minutes.

We’re firm believers in the Golden Rule, which is why editorial opinions are ours alone and have not been previously reviewed, approved, or endorsed by included advertisers.
Motley Fool Money does not cover all offers on the market. Editorial content from Motley Fool Money is separate from The Motley Fool editorial content and is created by a different analyst team.Joel O’Leary has no position in any of the stocks mentioned. The Motley Fool recommends Barclays Plc. The Motley Fool has a disclosure policy.

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