A recent survey from Nationwide finds more than two-thirds of respondents — 68% — expect a recession within the next six months. Meanwhile, 62% of respondents believe the recession will be as severe or worse than the Great Recession of 2007 to 2009.
The findings show many Americans are still feeling the financial pinch as they dine out less, delay major purchases such as homes and rely more on credit cards, according to the survey of 2,000 individuals conducted between March 30 and April 13.
Kamila Elliott, a certified financial planner and co-founder and CEO of Collective Wealth Partners, a boutique advisory firm in Atlanta, said she has clients who are asking her about the prospect of a heavy recession.
Elliott, who is a member of the CNBC Advisor Council, said she reminds them there continues to be very positive economic news alongside the more negative headlines about banks or tech layoffs.
“One of the things I share with others is control what you can control,” Elliott said.
While what happens with the economy or your employer may be out of your control, there are steps you can take to help boost your personal financial security.
To put yourself on better financial footing, Elliott recommends starting by looking at your recent transactions and identifying where you can eliminate unnecessary spending.
With that extra money, try to reduce any debt balances you have, which will put you in a more positive position if there is a recession, she said.
By increasing your emergency savings, you can also increase your liquidity, Elliott advised.
This is helpful if you are laid off or encounter another financial emergency. Experts generally recommend having at least three to six months’ worth of expenses set aside to weather such an event.
On a positive note, Elliott said the strong job market has meant clients who have been laid off were unemployed for less than three months.
“Some of them came out pretty well,” she said.
If you’re five years away or even closer to retirement, now is the time to sit down with a trustworthy financial planner to make sure you’re on track, Elliott said.
For those who are farther away from retirement — with that goal 10 to 30 years from now — this may be a time to take more risks since you have time to ride out the market volatility, Elliott said.
The average market return tends to bounce back, which can result in meaningful progress over time.
Elliott said it reminds her of a famous quote from legendary investor Warren Buffett: “Be fearful when others are greedy and greedy when others are fearful.”
“We take that philosophy looking at our investments whenever there’s fear, and there’s risk, there’s also oftentimes opportunity,” Elliott said.
“For many, we’re using it as a buying opportunity to buy certain securities that are priced fairly low right now,” she added.