Despite some bright spots like low unemployment and slowly easing inflation, most economists still expect the US to enter a recession before the end of the year, according to a recent Wall Street Journal poll.
While you may not personally feel the brunt of a recession through a layoff or other large loss of income, those who are already financially behind are at greater risk of a recession destroying their livelihoods. That could explain why women – who still earn less than men on average – are more worried than men about an imminent recession, according to a recent Bankrate survey.
Not only are 74% of women (compared to 65% of men) concerned about an economic downturn, but almost half of women say they will be unprepared if the US falls into a recession this year, Bankrate found in a Survey of nearly 2,400 adults finds.
Recessions can affect people differently, regardless of gender, but Bankrate found several indications that women are at greater risk of getting into trouble during a recession. Many women take steps to avoid a potential disaster.
Increasing your savings or getting out of debt quickly may be easier said than done. One solution is to find ways to increase your income. Asking for a raise or a promotion at your current job might work, but companies are also preparing for a recession and may not be keen on increasing your salary.
Gailey says now might be a good time to find and move to a better-paying job, but not just for a raise.
“Money alone is no reason to change jobs. It should also make sense for your short- and long-term professional growth,” she says.
In addition, it is important to keep your financial goals realistic. If you can’t increase your income and saving three to six months of expenses isn’t feasible right now, there are smaller steps you can take.
“Putting just $10 or $20 a week in a savings account can make a significant difference over time,” says Gailey. “Plus, it allows you to build the habit of paying yourself first.”
Although the cards can be stacked against women, they are doing their best to prepare for a coming recession. Women are more likely than men to report cutting back on discretionary spending, saving more for emergencies and looking for extra income, Bankrate found.
Also, only 24% of women said they were doing nothing to prepare for an economic downturn, compared to 27% of men.
Some women are confident they can weather a recession in the coming year, with 39% of women feeling reasonably prepared and 13% very well prepared for a recession before the end of 2023.
If you fall into this camp, now is a good time to focus on investing for the future. Increasing your 401(k) contributions, adding to an Individual Retirement Account (IRA), or opening a brokerage account are just a few ways to get started.
“Investing in the stock market is one of the most democratic ways to build wealth because the stock market doesn’t care about gender or race,” says Gailey. “Remember to keep a long-term mindset even when markets are volatile. Historical data shows that staying the course is a winning investment strategy.”
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