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The economy hasn’t yet taken a tailspin into a recession, but what if it does?  If you’re not sure that your family would be prepared for a national economic downturn, there’s no better time than now to get armed.

I flip my TV to Today every morning while I get ready for work, but often in my rush, I miss intriguing news stories I’d like to understand more about.  It’s a good thing there’s Today.com for me to catch up on what I was too busy blow-drying my hair to hear, like this article by The Associated Press featured on their “Life Inc.” blog.

As a caveat, it’s important to realize that the superfluously tossed around term ‘recession’ isn’t synonymous with the aura of a bad economy.  A recent report from the Economic Cycle Research Institute provided a more accurate definition, explaining:

“It means an economy that keeps worsening, because it’s locked into a vicious cycle.”

While families are fighting back by cutting down on spending, recent data shows they’re earning less.  Prior to a possible onset of a nationwide fiscal crisis, two crucial components to broadly assess, are your household finances and job security.  Here’s what to include in crafting your economic emergency plan:

Finances

First step: cut down on big expenses and eradicate small ones.  Consider reworking your insurance policies and mortgage (big expenses) to possibly save hundreds of dollars per year.  If you don’t have an emergency nest egg established, it’s a great idea to set aside the money you would spend on frivolous purchases (fast food and entertainment, for example) and roll it over into a savings account.  How much should you have saved up in this crisis fund?  Gurus suggest aiming for at least six months of expenses reserved, but amp up the amount if you’re fearful of job loss.

There are plenty of other areas to rake in savings besides trimming major expenses and slashing frivolous spending.  Experts recommend avoiding late fees at your bank by signing up for automatic bill payment, negotiating a waiving of your annual credit card fee, or setting up a monthly payment plan for various debt.

Career

If you’re quivering over rumors of possible cutbacks at your company, reflect upon career advancement tactics that will help in keeping you ahead. If you’ve got bold and brazen ideas, suggest solutions to the problems your organization is dealing with.  Prefer to coast and stay under the radar at your 9-5?  It’s crucial that your boss understands your accomplishments to date and realizes your impact on the company.  Meanwhile, it never hurts to polish up your resume and sell yourself to your networks outside the office in the event of an unfortunate and untimely job loss.

The likelihood of a recession may be looming, but the effect it could have on your family will likely be much less if you’re prepared.  What are you doing to brace yourself in the event of a financial downturn?  Share your saving savvy with us below!

Read the full recession proofing rundown on Today.com.

Stephanie Koske is a writer for Quicken Loans, a company whose clients believe it’s Engineered to Amaze.  Interested in being Amazed by us? Read trusted reviews at our review site and at Epinions.

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