Recessions typically last six to twelve months so keep that in mind when planning any large expenditures this year such as a house renovation, car purchase, or travel. You may need to delay these expenses or forgo them entirely so that you can keep appropriate cash on hand if you or someone in your household is adversely affected.
To 'manage your cashflow', it simply means to schedule the timing of your expenses with cash inflows. You want to avoid a month where your expenses are so high that you need to dig into your savings or emergency fund to pay bills on time. If cash inflows such as employment income are at risk of being reduced or eliminated, it may make financial sense to build up more of a cash reserve and delay large purchases.
Some of the earliest signs of an impending recession can be hiring freezes and mass layoffs. Companies in the oil and gas and technology sectors tend to lead with job cuts ahead of a recession. Now might be a good time to strengthen your professional network and update your resume. Don’t wait until your hours are cut or you lose your job to prepare for the job search.
It's likely that you have insurance tied to your employer such as medical and life insurance. If you lose your job, you'll want to maintain this coverage as unexpected events can derail your financial strategy. Now would be a good time to start looking into alternatives and the costs of maintaining these coverages on your own.
If the news of an impending recession has you worried about your ability to reach your financial goals, it may be worth a discussion with your Edward Jones financial advisor to review your risk tolerance. There are two main components to determine your risk tolerance: 1) Your ability to take on risk and 2) your willingness to take on risk. You may have the ability but not the willingness, therefore adjusting your portfolio to be more conservative might make sense. Keep in mind that by taking on less risk, you may experience less market volatility in your portfolio, but you are also likely to realize a lower rate of return in the long-term. Risk and return are a tradeoff.