How do I financially prepare for a recession or job loss?

Increase your buffer, reduce your fixed costs, and improve your employability — in that order. The instinct is to focus on investments, but for most people the exposure is cash flow and job security, not portfolio composition. **Financial preparation:** 1. **Extend the emergency fund.** In an uncertain market, six months of essential expenses is a better target than three, because job searches take longer when hiring slows. If building that will take time, get to one month quickly and keep going. 2. **Cut fixed costs, not just discretionary ones.** A cheaper phone plan, a downgraded subscription tier, a renegotiated insurance premium — these reduce your monthly burn permanently and lower the amount of runway you need. Fixed costs are what make job loss dangerous; variable ones you can stop overnight. 3. **Pay down high-interest debt**, which is what turns a temporary income gap into a lasting problem. 4. **Avoid taking on new fixed obligations** — a car loan, a bigger flat — while your income feels uncertain. 5. **Know your credit position and available lines** before you need them. Credit is easiest to get when you don't need it and hardest immediately after job loss. **Career preparation, which matters more than most financial moves:** - **Keep your resume and profile current** rather than updating them in a panic. - **Maintain your network actively** while employed. Relationships built during a search are far less effective than ones that already exist. - **Be visible at work.** In redundancy decisions, people whose contribution is clearly understood fare better than equally good people whose work is invisible. - **Keep skills current**, particularly in the areas your industry is moving toward. - **Know your market value** — take the occasional call from a recruiter, even if you're not looking. **On investments**: if you have a long horizon, the correct action during a downturn is usually to keep contributing and do nothing else. Selling into a fall converts a temporary paper loss into a permanent one, and the recoveries historically happen faster than most people expect. What you should *not* do is have money you'll need within two or three years invested in equities. **And the psychological piece**: knowing your exact runway in months converts diffuse anxiety into a manageable number. That calculation is worth doing this week — it's usually less frightening than the vague version living in your head.