How to survive a recession: Six tips for Gen Z and those who haven’t faced one before

I graduated in the midst of the 2009 recession, and I remember how challenging it was to find a full-time job. With my networking skills, I was able to land a full-time role in the hospitality industry. Although I didn’t have much invested in the stock market in my early 20s, I still anxiously wondered if and when my portfolio would rebound. Plus, with so many layoffs happening around me, I felt I needed to work even harder to keep my new job. 

Here’s what I learned living through that recession. I hope these lessons help you prepare and protect yourself to weather the storm ahead.

1. Contribute to your rainy day fund

Unexpected events can happen anytime: Your car breaks down. An appliance needs replacing. Medical expenses pile up. More commonly, you get laid off by your employer. All of these unpleasant surprises have happened to me. In those instances, having an emergency savings fund helped me cover the necessary expenses. I’m thankful I had extra savings set aside for precisely this purpose.

The general guideline is to have an emergency fund that can cover expenses for three to six months. Save more money if you can, especially if you are facing uncertainty about your future. It’s best to put your money into a savings account that you can easily access. If putting aside that much sounds too intimidating, start off with small and regular contributions, and then work your way up to saving more.

2. Update your resume

An economic downturn typically means a slowdown for businesses and, eventually, layoffs for employees. Last year, we witnessed massive layoffs in the tech industry. Major companies including Amazon, Facebook and Shopify reduced their staff and provided severance packages. 

If you work in an industry that may be affected by a recession, take this opportunity to review your resume. Add in recent accomplishments from your annual performance review or new courses you’ve completed. You might even consider using your polished resume to find a new recession-proof job.

With a tight job market in Canada and low unemployment rates, you can use “career cushioning” to land your next job. This fancy new buzzword refers to lining up your next job while holding onto your current one. Assess your current skills against those that are in demand for your industry, and keep your network (from your past and current work experience) alive.

If you’re looking for your first job out of post-secondary school, highlight the student organizations you’ve participated in, volunteer work you’ve done and internships or co-op placements you’ve completed. This will make your resume stand out from your graduating class.

3. Upgrade your skills

You likely have acquired specific skills to perform in your current job. Now is a good time to take initiative and learn a new skill to make yourself more valuable to your current company and more hirable in your industry. Some employers will cover the expenses of taking a course either by paying for it upfront or reimbursing you after receiving proof of completion. Taking several courses within the same field of work may lead to a certificate or industry designation, such as a project management certificate. 

There are online courses such as LinkedIn Learning or Udemy. Local training companies and colleges and universities may also provide in-person or hybrid classes. Once you’ve completed the course, you can add it to your resume and share your accomplishment on your LinkedIn profile. By chasing new knowledge and skills, you can stay up to date with industry standards and take advantage of the continuing education opportunities available to you.

4. Reduce your expenses

During a recession, you’ll want to be mindful of your spending habits. Take time to review your monthly budget to figure out where you can reduce your spending. Here are a few ideas to get you started:

• Cancel monthly subscriptions or memberships that you no longer use.
• Dine out and/or order takeout less frequently.
• Waste less food and save on groceries by meal planning ahead of time
• Look for free or low-cost activities in your area (e.g. ice skating, attending a local festival, signing up for a recreational program)
• Buy items when they go on sale. Buy pantry items in bulk.
• Use promo codes when buying items online or coupons when shopping in-store.

Cutting down on costs can help you keep more money in your wallet.

5. Avoid taking on too much debt

When times are tough, it can be tempting to put purchases on your credit card or take out a loan. While it may be convenient to do so, certain kinds of debt, such as variable-rate loans and lines of credit, have become more expensive following hikes to the Bank of Canada’s interest rate.

To avoid taking on debt, you may opt to pay by debit card instead which will take money directly from your chequing account. Although this method doesn’t allow you to build up your credit score, it prevents you from spending beyond your means.

If you are taking on multiple debts, such as your student loan and credit card, decide which one you’ll pay off first. For instance, credit cards typically charge around 20% interest, whereas your student loans are likely currently charging between 6 to 8% interest. Tackling the debt with the highest interest first can help you get out of the red faster. 

6. Know that this too shall pass 

Take solace in knowing that this is temporary and is part of the natural economic cycle. A recession will not last forever. On the bright side, it could be a golden opportunity to take advantage of the stock market slump and invest your money for the long term.

Read more Making It columns:

• Working towards your dream lifestyle? Here’s how financial goals can help
• Take control of your finances with these budgeting tips for young adults
• How to improve your credit score
• How to manage money as a student

About Sandy Yong

Sandy Yong is a personal finance writer, TEDx and Keynote speaker, and the award-winning author of The Money Master. She’s been featured in hundreds of media outlets including CTV News, Global News, Forbes, The Globe and Mail and The Toronto Star.

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