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Is A Recession Coming in 2023?

The economy has seen some major ups and downs in the last few years. When Covid-19 hit, it took quite the toll on the world’s economy. And in the United States, things are no different. We’ve seen supply chain issues, unemployment, housing market ups and downs, and some steep lows on the stock market. So, what does all of this mean? Is a recession coming in 2023? If so, how do we prepare?

What Is A Recession?

Before we dive into preparing for a recession, we want to first define what a recession is. A recession is a significant downturn in the economy, caused by a number of factors, but specifically a GDP (gross domestic product) that’s continually trending down. When this happens, the economy slows including employment rates, consumer spending, stock market values, and more. 

How to Prepare for A Recession

One of the biggest things to remember during a recession is that you can’t control the economy but you can control what you do with your personal finances. That may go without saying, but the best thing you can do to prepare for a recession is to make sure you’re financially stable. Here are a few tips that will help you do just that:

1. Save.

This may go without saying, but we need to say it anyway. Make sure you’re saving a good chunk of your income each month for emergencies. Some call it a “rainy day fund” and others an “emergency fund.” No matter what you call it, it should be anywhere from three to six months (or more) of your monthly expenses. Just remember: It’s for emergencies only. You never know what life will throw at you and having this fund will give you peace of mind as you move ahead.

2. Spend wisely.

When the economy is booming, it’s easy to want to spend money and splurge on quality items, extras, and things that we may not necessarily “need.” But during a recession, the idea is to make do with what you have and spend your money wisely. Part of wise spending is keeping track of your spending with a budget. A budget helps you see exactly how much money you have coming in and how much money is going out—every single month. Once you begin tracking your spending, you’ll get a better idea of where you need to cut back, how much more you can save, and where you can be more frugal with your spending.

3. Avoid taking on more debt.

If you’re not in a pinch, waiting to buy big ticket items that lead you further into debt is key. If you’re renting (and able to afford your rent), or if you’re tossing around the idea of buying a home, it’s best to wait as long as you can. The same goes for purchasing new cars. Taking on a hefty car payment when the economy is slowing down may not be the best idea (depending on your circumstance, of course). 

Either way, avoiding more debt and learning to manage the debt you already have is best practice. Get on a budget and figure out just how much you can begin to put toward your credit cards and other bills that are holding you (and your finances) back from saving more.

4. Work with an advisor on your investment strategy.

One of the worst things you can do during a recession is panic. Taking your money out of your retirement accounts or stopping your investments completely will hurt you in the long run. Work with your SageSpring advisor to determine a strategy for any investments you might be worried about. We’ll help you determine the best plan of action for your investments moving forward.

Remember, we can’t control the economy. But we can control how we respond to it—especially when it comes to our finances. Don’t panic and stick to your plan. And in the meantime, thinking through your spending and financial preparedness is one of the best things you can do to prepare for a potential recession.

Work with a local SageSpring advisor in your area today. We’ll make sure you feel confident moving into this next season.

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615.861.6100
Jeffrey Dobyns
Jeffrey T. Dobyns

CFP®, CLU, CHFC

President, SageSpring | Financial Advisor, RJFS 
615-861-6102

Jeffrey T. Dobyns

President, SageSpring | Financial Advisor, RJFS

Jeff Dobyns has enjoyed extraordinary success providing comprehensive financial planning to retirees, entrepreneurs, entertainers, and executives by taking the time to truly know his clients, understand their goals and develop and execute their ongoing, strategic, financial plans.

Jeff earned his finance degree in business administration from Ohio University and has held executive positions with financial planning firms for more than two decades. After serving as Vice President of Investments of Lykins Financial Group, CPA’s, in his hometown of Westerville, Ohio, Jeff moved to Nashville, Tennessee to found SageSpring Wealth Partners in 2002. As its President, Jeff has led SageSpring to remarkable success, holding the distinction of being one of Raymond James’ top independent contractor offices, and a member of its Chairman’s Council*, every year since 2008.

Jeff’s true calling, however, is working directly with clients, helping them plan their financial futures in a manner that aligns with their values and helps provide them with financial confidence. To help meet these goals, Jeff leads the team of Dobyns Wealth Team and also incorporates the expertise of attorneys, accountants and other professionals to provide quality financial, tax and estate planning, and ongoing asset and risk management.

As independent advisory businesses, neither SageSpring Wealth Partners nor Dobyns Wealth Team hold any assets on behalf of clients, with such custodial and brokerage services being provided by Raymond James. As a leader in wealth management, Raymond James has an exemplary reputation and today serves more than $930 billion in client assets through 8,200 financial advisors worldwide (as of 9/30/2020).

In order to meet the highest standards of professionalism and ethics in the industry, Jeff is a CERTIFIED FINANCIAL PLANNERTM practitioner**, a Chartered Life Underwriter and a Chartered Financial Consultant. Jeff is also a participant of the Dave Ramsey SmartVestor program.

Jeff’s work and personal life are both guided by his faith and the Christian principles of honesty, generosity, compassion, and integrity. Accordingly, Jeff devotes considerable time and resources to a number of causes, including serving as a board member of Men of Valor, a prison ministry and mentoring program. He is also on the advisory board of The Signatry of Middle Tennessee, which works with families to increase their charitable giving to their favorite causes. Additionally, Jeff is on the advisory board for Halftime Institute, an organization that coaches marketplace leaders to discern and engage in their life purpose. Lastly, Jeff serves on the board of the Legacy Center of Nashville, a collaboration of independent coaching resources. He is a past board member of Porter’s Call, a Nashville charity that provides free counseling for musicians and their families, and the Martha O’Bryan Center, which empowers those in poverty to transform their lives through work, education, employment, and fellowship.

Jeff and his wife, Amy, are raising their family in Brentwood where they are members of the Brentwood Baptist Church, and their children, Gracyn, Hunter, and twins Tanner and Logan, attend the Christ Presbyterian Academy. For recreation, Jeff enjoys hunting, fishing and just being outdoors.

* Membership is based on prior fiscal year production. Re-qualification is required annually.

**Certified Financial Planner Board of Standards Inc. owns the certification marks CFP®, CERTIFIED FINANCIAL PLANNER, CFP® (with plaque design) and CFP® (with flame design) in the U.S., which it awards to individuals who successfully complete CFP Board’s initial and ongoing certification requirements.

SmartVestor is an advertising and referral service for investing professionals (“SmartVestor Pros”) operated by The Lampo Group, LLC d/b/a Ramsey Solutions (“Ramsey Solutions”). Pursuant to an arrangement between Ramsey Solutions, SageSpring Wealth Partners and your advisor, your advisor pays Ramsey Solutions a flat monthly fee to: (a) be a SmartVestor Pro, (b) advertise services through the SmartVestor website, and (c) receive client referrals in the form of an initial introduction to interested consumers who are located in your advisor’s Pros geographic region. SageSpring Wealth Partners does not endorse and are not affiliated with Ramsey Solutions, except with respect to the arrangement described above, and neither Ramsey Solutions nor its agents are officers or employees of SageSpring Wealth Partners. Further, neither Ramsey Solutions nor its agents are authorized to provide investment advice or act in any way on behalf of SageSpring Wealth Partners, except in connection with providing your contact information to your advisor.

Ramsey Solutions’ relationship and agreement is between SageSpring Wealth Partners only. Raymond James Financial Services, Inc. is not affiliated with the solicitor arrangement between Ramsey Solutions and SageSpring Wealth Partners.

Raymond James is not affiliated with any of the organizations mentioned above.