I'm a freelancer, and there are 4 things I do every month to prepare for a recession

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The author is not pictured.

• At this point, another recession seems highly likely. Since I'm a full-time freelancer, I'm starting to prepare myself financially.
• Every month, I make a budget and work hard to stick to it. I've also increased my savings and am actively building an emergency fund.
• I'm working hard to pay off my debt, too, since I'll need every dollar if a recession hits and my income drops.
• Read more personal finance coverage.

With 2019 nearly over, there are a handful of hot topics that seem to pop up during every social event, weekend brunch, or chat with friends, and they all start with the letter R: 2020 resolutions, 2019 regrets - and the threat of an upcoming recession.

When the topic of a possible recession enters the conversation, people usually tell me, someone who hopes we can go a few more decades before one of those happens again, the same thing.

"Jen, it's not a matter of if a recession will happen, it's a matter of when."

The when part is what makes someone like me, type-A and over-prepared for everything, feel a little uneasy. 

That's why I've been putting together my own personal recession to-do list since July, working on a handful of things every single month to prepare for that future financial likelihood. 

Because I've been freelancing for close to five years, and knowing that my finances can withstand a potential rocky economy helps me sleep at night, there are four things I do every month to recession-proof my finances.

Sticking to a budget 

I've always been very good at setting budgets - and then, days later, forgetting they exist. In order to prepare now for the future recession, I've started to plan out a detailed weekly budget.

Jamie Gibbs, the founder of Bubbling Brook Budgets, agrees that this is a smart strategy.

"If you're not on a budget and don't know where every dollar of yours is going, this is what you need to work on right away," Gibbs recommends. "That way, when the next recession comes, you'll know exactly what you're spending and what you can cut out, if necessary. The thing about a recession is you really don't know how it will impact you until you're in it. You could lose your job unexpectedly and have to make a career shift. Getting prepared now for any possible scenarios could save you so much stress when you find yourself in crisis mode."

At the end of every month, I look at how many weeks I was able to stick to the budget I created, how much I was able to put away in savings, and how to adjust going forward (so I can be practical and not extremely frugal - yet). 

Increasing my savings 

For years, people have recommended that I build an emergency fund (more than the stash of cash I have under my bed). That way, if something happens to the economy or my freelance income, I have cash in savings to help cover immediate bills.

Matt Junkins, a financial adviser with Wells Fargo, recommends starting to build your emergency fund long before a recession hits

"If a typical client needs six to 12 months of full expenses in the bank, we would increase that recommendation to 18 to 24 months for clients who freelance," Junkins recommends.

I don't have that much cash in my emergency fund savings account yet, but I've been carving out a portion of my monthly paycheck for that purpose. That way, I won't have to panic and start an emergency fund if a recession hits, especially if I need to tap into it quickly. 

Keeping an eye on the market 

Earlier this year, I put money into the stock market for the very first time. While I did spend the first half of 2019 increasing my investment portfolio, I'm now starting to prepare for a potential recession by reducing the amount of cash I invest.

Michael Foguth, founder of Foguth Financial Group, thinks it's the right move.

"One of the main things people can do right now is to not put all of their eggs in the market," Foguth says. "Most people make the mistake of saving for their retirement and future by investing all of their funds into the market ... Investing all of your money and not having any cash at the next market downturn can be a mistake."

Decreasing the amount I'm putting into  the market every month (I've lowered my investments by 25% monthly) has allowed me to store cash away in savings and my emergency fund.

Paying off debt faster

If a recession hits, one thing I don't want on my plate is debt. That's why I'm becoming even more aggressive in paying off any debt that I have.

Lauren Mochizuki, a personal finance lifestyle blogger, recommends that you strive to put extra money every month towards paying down debt. This saves you lots of money in interest over the life of the loan, and can eventually free up your income to save for your future. 

I'm very close to paying off all my debt with the hopes of being able to cross this off my monthly game plan to help plan for a recession.

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