There’s been some speculation that Canada could experience a potential recession in the coming year. It can be alarming to consider the effects of a downturn, but with some advance planning, you can help keep your finances in order during economic uncertainty.
Ensure your emergency fund is sufficient. Ideally, the funds in your emergency account should cover at least six months’ worth of expenses. Having this safety net will help you meet your basic financial obligations for half a year, even during a potential recession. To help bolster your emergency fund, create a budget and analyze your spending to identify areas where you can cut back and funnel any extra money into savings.
Tackle debts with the highest interest rate. Begin the new year by assessing all your debts and making it a priority to pay down the account with the highest interest rate. If you’re able to completely pay off one account, continue making additional payments to the account with the next highest interest rate.
Review investments with a financial advisor. It’s important to have a solid understanding of your investments prior to a potential recession. Meet with an advisor and review your level of risk for your whole portfolio. You can make any adjustments now to help safeguard in the future against a downturn.
Purchase Life, Disability and Income Insurance. Hudson’s Bay Financial Services offers a unique product that pays a monthly benefit in the event you lose your job due to a layoff, business closure or company restructuring. With the threat of a potential recession, there could be an increase in layoffs, and having the protection of income insurance can help cover monthly expenses while looking for a new job.
For more than six decades, Canadian Premier Life Insurance Company has been committed to providing financial security for Canadians who are facing uncertainties. They now insure more than 1 million Canadians from coast to coast.