Taking Care of Your Money During a Recession

This global pandemic with the increasing likelihood of a recession along with the insanely high levels of unemployment is a situation which many of us are unprepared to deal with.

I have been unemployed, but the last recession was before I entered the workforce, so I don’t feel qualified to give great advice on the matter. I can share what I am doing, but I decided to turn to the experts for actual advice! I asked 15 personal finance ladies to share their advice for handling money during a recession and while unemployed.

Without further ado…

What 15 Personal Finance Bloggers Would Like You To Know About Money During This Recession

We obviously can’t advise without sharing what we are doing first. The first question I asked was:

Have you made any changes to how you are handling your money?

The Answer: Cut Spending. Stop Paying Down Debt. Save More.

Cut Down

The first thing to do is to cut down on unnecessary spending and luxury spending. Here is how we are doing it:

“I am budgeting more closely and have eliminated all unnecessary expenses”- Diane from “Life with a Budget.”

“I have cut down on all the unnecessary shopping. Just groceries, and that’s it. Changed my internet plan to the cheapest one.” – Nadia from “Speaking of Cents.”

“I am saving more and not making big purchases that we planned to make before this happened. We are also not eating out as much, so we are saving money on that but have had a big increase in groceries. Overall we are saving more and spending less.” – Ashley from “Budgets Made Easy.”

“We’ve shifted to having more of an emergency fund and have been saving money from what we are not currently spending due to social distancing. For example, we’re spending less on gas and going out.” – Emily from “Firebird Finance.”

“I am spending less on items that are luxuries in favor of holding onto cash at the moment.” – Nurse FERN.

money during a recession

Stop Debt

If you are currently working towards paying down debt (a very admirable goal!), it may be a good idea to put a pause on that. Now is the time to hoard cash instead of paying down debt (beyond the required payments).

“We are halting our debt snowball, holding all money in savings for now” – Kristian from “Honey Bee Budgets.”

Of course, there may be a situation where you want to pay down certain debts. Maria explains why she used her stimulus check to pay some student loans:

“We stopped our debt snowball and save all the money we can right now. My husband just started a new job in March, and I’m furloughed. However, since I have job security until March 2021, we used the stimulus to pay off our second to last student loan. We are currently living in Germany, and moving the money from the US would not have made sense financially due to fees and transaction costs.”- Maria from “Auf Heller Und Pfennig.”

Save More

When facing a recession, unemployment, or possible unemployment, it’s a good idea to save, save, and save more. Hoarding cash is definitely where it’s out right now, even if that means slowing down investing.

“My family has been still contributing to our savings, but we are doing less spending overall, especially on restaurants and activities. We’ve also increased our emergency fund. Once things settle down, we’ll put this excess towards debt.” – Steffa from “Money Tamer.”

“We have increased our emergency fund. We have also paused any investments and have focused on saving.” – Maria from “Handful of Thoughts.”

Already Lean

Of course, if you are already lean and frugal, there is not much to cut, and if you have already optimized your finances, then there doesn’t need to be much change to how you are handling your finances!

“I’m spending more on take-out to help local businesses. Otherwise, my spending hasn’t changed much.” – Ana from “Goatdog Simple.”

“Already living lean, already hustling – that said, I’m avoiding looking at my investments for a while :)” – Esther from “NZ Muse.”

“I’ve stayed the course – I’ve always kept a budget and saved a high percentage of my income. Where I’m spending money has changed (increased food and charity spending, decreased travel and fun spend).” – MC from “Keeping Up With The Bulls.”

“We have not made any changes to our finances. My husband and I have always been frugal and have always kept our expenses extremely low.” – Lauren from “Trip of a Lifestyle.”

What Is the Best Advice You Can Give to Someone Who Is Unemployed?

Millions of Americans and others worldwide are unemployed. With a recession looming, there is a good chance that even more people will lose their job. Unemployment does not need to mean the end. Here are some ways to get through it. Besides trying to find some creative ways to make extra money, you can do the following:

Stay Positive and Take Care of Yourself

“As someone who is currently unemployed and lost their job due to COVID – the best piece of advice I can give someone is to stay positive. This too shall pass.” – Diane from “Life with a Budget.”

“On top of taking care of your cash flow, it’s important to remember to take some time for your mental health as well. Even if it’s something as simple as taking a walk every day.” – Emily from “Firebird Finance.”

Cut Everything and Prepare for the Long-haul

“Cut all nonessential expenses and save what you can from unemployment. Then make a plan for once you get back to work on how you can save 3-6 months of expenses in the future.” – Ashley from “Budgets Made Easy.”

“Don’t expect or rely on unemployment income to last forever. If and when it ends, you will want to have a backup plan, whether that be a plan for quickly applying for jobs that can provide increased income and health insurance, etc. Save your money during this time and live frugally. Challenge yourself to form positive habits with your money despite the emotional weight that may inevitably arise during this time.” – Ashley from “Budgeting on a Budget.”

“Create the leanest budget possible– cutting out any excess. Look for part-time work/temp work, something to bring in money while you’re figuring out your next move.” – Ana from “Goatdog Simple.”

“Review your expenses to see if there are any obvious changes you can make. Look into government assistance programs as there are many out there for this particular unprecedented time.” – Maria from “Handful of Thoughts.”

“If you qualify for unemployment or additional funds via the stimulus packages, do not delay in signing up. But it’s important to find a long-term solution as well, so find a way to make money today. It can be as simple as selling unused items. We’ve actually used this time to declutter and sold both an old Keurig and a busted up phone for $20 each. Cold call people and businesses in your area to offer services within your skillset that you feel comfortable performing, such as cleaning, lawn care, or even helping a business with their social media.” – Lauren from “Trip of a Lifestyle.”

Use This Time To Prepare for a Better Future

“Get your resume updated, reach out to local nonprofits providing employment services. Network!” – Kristian from “Honey Bee Budgets”

“Now feels like a good time to upskill where you can. Take those online classes (there are lots of deals on at the moment, as well as free options) that you’d always wanted to get around to.” – Esther from “NZ Muse.”

Create a short term career plan, network, and update your linked in, take advantage of free online training such as LinkedIn Learning to improve your skillset, and increase your odds of landing a new job.” – MC from “Keeping Up With The Bulls.”

“If you’re unemployed and traditional jobs in your area aren’t hiring, reach out on Facebook and NextDoor app. Lots of your neighbors are still hiring for work to be done, so if you have certain skills, you can market them to your neighbors until more steady work opens up.” – Steffa from “Money Tamer.”

Take Help That Is Available to You

“Stick to bare minimum and find all the free resources provided by the city you live in.” – Nadia from “Speaking of Cents.”

“Budget and cut the pork! File immediately for unemployment and pay the four walls first (house, energy, food, and transport). You are not alone in this!” – Maria from “Auf Heller Und Pfennig.”

“Apply for assistance! So many people don’t because they think asking for help is a bad thing. But that’s what is for!” – Melanie from “Partners in Fire”

“Get your head around any help that may be available to you and take advantage of everything you qualify for – if you are out of work due to COVID, there may be specific entitlements as well to help.” – Esther from “NZ Muse.”

“Know what benefits are available to you, cut your spending to a minimum, and know how long your cash will last.” – MC from “Keeping Up With The Bulls.”

“The best thing for someone who is unemployed is to apply for unemployment. It can be a frustrating process, but this is something that can help keep their finances afloat. With that safety net in place, look for other avenues to either trim expenses, bring in extra income, or, in extreme cases, tap into other savings.” – Emily from “Firebird Finance.”

“Utilize the resources available, seek out Facebook groups, and helpful friends who know how to work the system and get you the benefits you are entitled to.” – Nurse FERN.

What Are the Smartest Money Moves To Be Making Right Now?

Not One Size Fits All! What You “Should Be Doing” Highly Depends on Your Situation.

“The smartest money moves depend on what situation you are in. If you don’t have an emergency fund or it’s underfunded, you should either increase your income through a side hustle (ex. tasks on task rabbit, Instacart) or cut your spending. If you’ve recently lost your job, cut your spending as much as you can but spend the most time finding a new job. If you’re employed, run “what if scenarios” if you do lose your job or if you have to take a pay cut how that changes your finances. If you’re comfortable financially, you should be evaluating investments, buying items you’ll need in ~12+ months that are selling at a high discount right now (ex. travel accessories, shoes).” – MC from “Keeping Up With The Bulls.”

Now Is the Perfect Time To Maximize Your Savings

“Invest in high yield savings accounts” – Diane from “Life with a Budget.”

(MY NOTE: Check out Bankrate for different bank rates. Ally and Barclays Bank both usually offer good, steady rates)

“Save! Save! Emergencies are a lot more in our face due to the pandemic. Shows how easily the unexpected can happen” -Kristian from “Honey Bee Budgets.”

“Saving what you can and spending less.” – Ashley from “Budgets Made Easy.”

“Saving and investing” – Melanie from “Partners in Fire.”

“Keep your spending to a minimum. Invest if you can afford to.” – Ana from “Goatdog Simple.”

“A rainy day fund feels more important than ever to have stashed away.” – Esther from “NZ Muse.”

“Top two money moves I would encourage someone to make would be to save as much as they can and to live frugally. It’s uncertain how long the pandemic will last and if there will be more (serious) waves to come in the future. You can prepare yourself and your family as best you can through saving whatever discretionary income you have in your budget (make a budget if you don’t have one yet) and frugally spending when it comes to groceries, unnecessary bills, and expenses, etc.” – Ashley from “Budgeting on a Budget.”

“Increasing an emergency fund. Paying off debt is a good thing to do, but only if the emergency fund is already taken care of. For my clients, I recommend having a minimum of three months for a dual-income household. Additionally, I recommend a minimum of 6 months for those with only a single income or having a variable income.” – Emily from “Firebird Finance.”

“Build your cash savings. If you were planning major purchases or investments, consider holding off at the moment. If a job loss or emergency strikes, you’ll want the cash easily on hand. When this is all said and done, you can move the saved money to its original purpose. Money is comfort and security during the chaos.” -Nurse FERN

And the Personal Finance Favorite: Go Bare- Bones Budget

“Unsubscribe to the email newsletters to the expensive brands, so you don’t fall for the sale tactics that lure you into online shopping.” – Nadia from “Speaking of Cents.”

“Negotiate everything – your rent, your mortgage, your insurance bills, your cable bills – everything. A few hours of your time can help you save hundreds, if not thousands of dollars. Use your loyalty points. If you have been saving up those points for travel and you have recently lost your job, now may be time to re-evaluate those points. The future of travel and when borders will begin opening up is very uncertain. There is often a dollar amount associated with your reward points. Redeeming them for cash may not be the best redemption conversion, but it could mean extra money in your pocket in a time when you need it the most.” – Maria from “Handful of Thoughts.”

“Probably the smartest thing anyone can benefit from in uncertain times is finding ways to cut expenses. The highest costs should always be analyzed first — things like housing and transportation — and then move on to recurring costs that add up over time — like paying for cable if you only use streaming services — and finally the smaller one-off costs — like ordering take out instead of cooking another meal. I know it’s tough to cut out the things that might feel good right now, but if you’re really struggling, any extra savings is worth it. While it may be difficult to relocate while sheltering in place if you can’t afford to live where you’re living, and your job has disappeared or gone remote, consider it an opportunity to move to a lower cost of living area and start over more affordably.” – Lauren from “Trip of a Lifestyle.”

Being Unemployed Doesn’t Have To Be the End of the World. It Can Even Be a Blessing in Disguise!

“If you are unemployed, use the time to re-evaluate your goals. My husband lost his job in January because his employer went bankrupt. It was a scary time as we just moved in December. He came out on top with a five-figure increase in salary.” – Maria from “Auf Heller Und Pfennig.”

The Most Important Thing Is Not to Panic!

“The smartest money move to make is to do nothing. People panic and take money out of the stock market or retirement savings. This is the worst thing to do unless you’ve truly exhausted all other options. If you still have your job but worry, cut back on spending and put all extra money into a savings account so you have a nice cushion should you need it.” – Steffa from “Money Tamer.”

What Are the Dumbest Money Moves You Can Be Making Right Now?

Now that we know what we should be doing, it’s time to hear what we should NOT be doing! Make sure you aren’t making any of these money mistakes. And if you have been making them, now is the time to stop!

Not Being Aware of Fraud

“Not checking your credit card statements because there are so many money frauds going on right now. Investing in something from your 401K is a bad idea at this time.” – Nadia from “Speaking of Cents.”

Stay the Investing Course

“Spending money on unnecessary items, and investing in risky stocks” – Diane from “Life with a Budget.”

“Taking money out of your 401(k)” – Ashley from “Budgets Made Easy.”

“One of the dumbest money moves you can make is to pull your investments out of the market when it was going down. The market fluctuates. That’s just what it does. It also always goes back up – sometimes it just takes a bit longer.” – Maria from “Handful of Thoughts.”

“The one thing though that I would not recommend anyone do is to take their money out of the markets due to fear. If money needs to be taken as a loan or withdrawn to live on, that is different. Money taken out of the markets due to fear of a decline is not a good idea. This puts them in the position to miss growth and have to time when to put the money back in the markets. ” – Emily from “Firebird Finance.”

“The worst money moves are any that are made on impulse or fear. If you don’t need to cash in on your stocks to live, then let them be.” – Steffa from “Money Tamer.”

Spending Too Much

“You don’t need to stimulate the economy. Hang onto your money. Save every penny you can.” –Maria from “Auf Heller Und Pfennig.”

“Buying new cars and other stuff you don’t need” – Melanie from “Partners in Fire.”

“Not reigning in unnecessary expenses. Pulling money out of investments out of panic.” – Ana from “Goatdog Simple.”

“Another dumb money move is not adjusting your spending habits to your current situation. Now is not the time to try and keep up with the Joneses” – Maria from “Handful of Thoughts.”

“The most important thing people can do right now is not to increase their spending. For example, don’t buy a new car because it’s on sale or interest rates are low (in fact, I’d recommend never buying a new car again due to depreciation and the wide availability of reliable used vehicles).” -Lauren from “Trip of a Lifestyle.”

Losing Track of Your Goals

“Normally, I say that there are no dumb money moves, but there are moves that do not align with the spender’s values. Even in this stressful time, it’s important to keep your goals and values in sight. They might be sidetracked right now, but that doesn’t mean they disappear.” – Emily from “Firebird Finance.”

“Spending emotionally without thinking about the long term. Beating yourself up about the past. Focus on the future!” – Esther from “NZ Muse.”

“Not paying attention to your financial situation. You don’t need to know where every dollar is going, but at a high level, you should know how many months you could live with the cash you have on hand should something happen like a layoff or salary cut.” – MC from “Keeping Up With The Bulls.”

“Not planning for the future and not making financial decisions based on a second wave hitting in the fall/winter. By ignoring that potential reality and not staying up to date on current scientific happenings, we may easily fall into place this fall/winter where we are again experiencing job loss, increased potential medical bills, lack of income due to jobs closing/furlough, etc.” – Ashley from “Budgeting on a Budget.”

“Not being mindful of debt and what could happen if you lose your income. Living paycheck to paycheck could put you in a precarious position if you have high-interest debt. Make sure you know where your money is going.” – Nurse FERN.

Well, there you go! All the advice you need to help you weather this recession and survive or prepare for unemployment.

Are you making any changes to your finances at this time? Are you planning on taking any of this advice? Hit the comments and let me know!


Hi! I am a millennial mom with a passion for personal finance. I have always been “into” personal finance but got inspired to start my blog after a period of extended unemployment. That experience really changed the way I viewed my relationship with money and the importance of accessible personal finance education.

6 thoughts on “Taking Care of Your Money During a Recession”

  1. I have to say that this is a vital guide. I totally agree that being unemployed doesn’t have to be the end of the world it can even be a blessing in disguise! Thanks for sharing!

  2. Cutting back on spending has been key for us. We are doing take out maybe once a week to try to support local businesses but other than that we aren’t spending much. This has allowed us to continuously pay down debt which we’ve been working towards for a while. Great advice.


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