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It would not be surprising if you found yourself dealing with more anxiety lately. There's so much talk about the scary R-word—recession. The stock market has had some downright troubling days lately, and the tariff-induced trade wars have turned the world upside down. In this rocky, uncertain economy, how can you keep your calm amid what feels like calamity?
"Periods of uncertainty can be uncomfortable, but in life, there will always be factors that are outside of our control—it's important to focus on those factors you can control. With finances, the worst thing you can do is be reactive. Being unprepared, without a plan in place, can leave you open to financial distress, hardship, and the options available are likely to be far more costly and painful," says Jordan Banning, a certified financial planner and founder of Crafted Financial Planning.
A crash course on how to successfully navigate this economy might be just what you need. Inhale, exhale, and hear what the experts have to say.
Hit the pause button
"The very first thing—very first—is cut back on discretionary spending. Immediately. Not forever but for right now," says Jennifer Kirby, co-founder of Talisman Wealth Advisors.
She says she's not talking lattes from Starbucks but bigger ticket—trips, extra clothes you don't need, eating out a lot, unnecessary or unused subscriptions, and so on. "If it isn't delivering something you need now, I suggest you pause it," says Kirby.
Revisit your budget
Know where your money's going. "Pull your last three months of bank and credit card statements and break spending into three categories: needs, wants, and likes. That's your road map," says Stewart Willis, president of Asset Preservation Wealth & Tax.
Then he says to prioritize and cut the fat. In this economy, many "wants" should take a backseat.
"The thing about budgeting right now—it needs to be flexible. I use the 50/30/20 rule with my clients (50% needs, 30% wants, 20% savings), but we adjust based on individual circumstances. Sometimes it's more like 70/10/20 during tough times, and that's OK," says Andrew Lokenauth, founder at TheFinanceNewsletter.com.
Stress-test your budget. "Run a what-if scenario. What if gas prices go up? What if your rent increases? Building flexible spending zones in your budget now will help you stay calm later," says James Francis, CEO of Paradigm Asset Management.
Expect the unexpected
If there was ever a time for an emergency fund, it's now.
"When the economy gets rocky, cash is king. Build your emergency fund. If you need to, pick up a weekend job or side hustle. The goal is to buy yourself breathing room," says Francis.
Aim to have a stash of cash to cover at least three to six months of expenses.
Pay down debt
Plan to pay down or pay off high-interest debt to keep your credit score high. "With the ever-changing credit market, you will want to have and keep your credit score high so that credit will be available to you if you need it," says Casey Brueske, a community education development specialist at PenAir Credit Union.
With the average credit card interest rates around 22%, the monthly interest charges and payments become even more painful during an economic downturn, especially if you've lost your job or are not getting freelance gigs like you were. Missed payments can hurt your credit score. Ideally, if you can, stay away from debt.
Avoid costly mistakes
When the economy is topsy-turvy, missteps can have greater consequences. Continue investing. "Don't pull everything out of the market out of fear. History shows recoveries follow downturns," says Lyle Solomon, a principal attorney with the Oak View Law Group, which specializes in debt and consumer law. Understand the damage of panic selling. "Locking in losses during market dips is the best way to derail your long-term financial health," says Solomon.
If you need to scale back contributions temporarily, do it—but don't halt them altogether, if possible, says Solomon.
You don't want to stop saving either. Make it easier to do so by automating your savings. Even $20 a week creates momentum that can help make you feel less stressed out about your finances.
Says Lokenauth, "Here's something counterintuitive—don't stop investing in yourself. One of my most successful clients enrolled in a coding bootcamp during the last downturn. She doubled her salary six months later. Smart upskilling can pay massive dividends."
Don't feel like you have to go it alone. Use free financial counseling resources offered by nonprofits and banks.
The takeaway
Says Solomon, "Tough economies test your financial discipline, but they also create opportunities for smart, steady moves that pay off later. Control what you can, avoid panic-driven decisions, and stay flexible."