Arizona’s economy has taken a hit during the COVID-19 pandemic. Restaurants, retailers and more shut their doors or dramatically altered operations. Workers were let go or furloughed, bringing Arizona’s unemployment rate up to 12.9% in April (compared to just 4.4% in February) according to the University of Arizona’s Economic and Business Research Center. With such massive changes, a recession may be coming our way. Here’s how to prepare.
Build up emergency savings.
If your emergency savings was depleted during COVID-19, or you didn’t have it in the first place, try to build a new one up quickly – even if it’s just a few hundred dollars. Set your emergency savings aside and don’t touch it unless it’s a true emergency – like unexpected expenses, loss of income or essential car or home repairs.
Pay down debt now.
If you’ve built up emergency savings and have some money to spare, consider putting it toward debt, especially revolving debt like a credit card. Freeing up some credit now means it will be available down the line if you’re strapped for cash and need a buffer.
Cut down on non-essential expenses.
Streaming services and meal delivery subscriptions are great when the economy is booming. If you’re preparing for tough times, though, it may be wise to evaluate which monthly expenses you can live without. Cut down to just one streaming platform or drop them altogether if you can. Meal planning and shopping in bulk can be a little easier on your wallet than pre-made meal services. If you do want to splurge once in a while, consider eating out at a locally owned restaurant – after all, supporting local businesses will help stimulate the Arizona economy.
Discuss adjusting your investments.
Meet with your wealth advisor to discuss how you can adjust your investment portfolio to be better prepared for a recession. Together, you can develop a guided wealth portfolio, so you’re prepared for the road ahead. FBN
By Miguel Maldonado
Miguel Maldonado is the northern regional president of OneAZ Credit Union.
