We’ve been hearing a lot about a double-dip recession lately, and for good reason. New claims for unemployment insurance are rising, the Labor Department reports. Income is down and poverty is up, Census data show. Economists in the recent Wall Street Journal survey give a double-dip in the next 12 months a one-in-three shot.
Consumers seem to expect another pullback too. In an exclusive TIME survey to be unveiled in coming weeks many say the economy has gone down hill in the past 12 months and that a recovery won’t begin for years.
As tough as this period has been on retirees (paltry interest income, crushed portfolios), it’s been even tougher on young people. They suffer one of the highest unemployment rates and their income has dropped the hardest – down 15.3% for the 15-to-24 set.
With all the talk about another recession, is anyone doing anything to prepare? The good news: yes. Most of the personal austerity measures that folks adopted after the financial crisis three years ago are still in place. But there has been some slippage. A CardHub.com study shows that we’re on track to increase outstanding credit card debt by $54 billion this year.
This is no time for fiscal fatigue. If we double dip, here are some precautions you’ll wish you had taken:
- Built an emergency fund If you don’t have one, start with $400 right away. That will cover most minor household emergencies. But build it to six months of fixed expenses as soon as possible.
- Paid down debt Cash is always tight in a recession. Get rid of credit card debt while you can.
- Gotten noticed at work Put in a full day and exceed expectations so that you are seen as indispensable.
- Downsized your life Get out of any unnecessary contracts (cell phones, car leases) by letting them expire and going with a less expensive alternative (keep the old phone, buy a used car). Consider a smaller apartment. Downsize or skip your vacation.
- Learned how to cook Eating in is a budget saver. So is sewing and growing your own food if you want to take things that far. Double-dip or not, we still have some rough road ahead.