Your No-Panic Guide to Surviving a Recession

In times like these, say two money experts, midlife women have an edge.

Moderated by Katherine Lanpher
Jean Chatzky is More's financial columnist.

SWONK: I think we have the worst income inequality in American society in more than 40 years. Unless you’re in the top income strata, you really are not doing as well. Last holiday season Tiffany’s had more success selling high-end jewelry — $25,000 to $50,000 — than $1,000 baubles in "blue boxes." This bifurcation becomes an even greater issue when the economy slows. I think a lot of people will be taking this to the polls in November.

MORE: It all adds up to a lot of uncertainty, which can be paralyzing.

CHATZKY: If you’re too uncertain to take action, this is a great time to consult a financial adviser. You can hire these folks for an hour or two, as with short-term therapists. You sit down and say, "This is what I’m thinking. Is this okay?’‘ They can give you the confidence to get moving.

SWONK: And let’s remember: Recessions don’t last forever. They hurt, but we do get out of them. And this isn’t the worst of times. Like a lot of women our age, I remember tough times. I grew up in Detroit in the 1970s and 1980s, when the auto industry was imploding. I used to bring lunch money every single day of high school to pay for my best friend’s lunch, because she had no money. My father was a GM executive, and we did have enough. But I saw him lose much of his wealth in the silver market crisis. And my mom’s credit rating disappeared the day my parents were divorced, when I was 15. She had to start from zero. I learned that you can lose everything — overnight. But what resonates for me is resilience. You can always come back.

CHATZKY: I’d point to another thing: camaraderie. You’ve got to stay accountable — not play money mind games with yourself. If you have a spouse or partner to help, great. Or get a friend involved.

MORE: I actually feel calmer after listening to the two of you. What’s your forecast?

CHATZKY: I am cautiously optimistic that people — especially midlife women — will get their financial lives in shape, maybe refinance some of that debt, save a little extra for an emergency fund. I tend to be very optimistic where the country and the markets are concerned.

SWONK: I agree. I hate to quote Rocky, but he said one thing in the latest movie that really applies. He’s explaining to his son why he wants to get back in the game, and he tells him that it’s not how hard a hit you can give; it’s how hard a hit you can take and keep moving forward. Our economy takes the blows and keeps going forward. That’s a metaphor for many women I know: We take a lot of blows and keep going forward.

Top 10 Ways to Thrive in a Recession

Your Money

Invest in support. Getting advice or a reality check from a financial planner is important when you are uncertain, especially for midlife women, who often have a complex mix to juggle, such as retirement savings, college tuition, and eldercare.

Avoid the buyout — if you can. Many employers offer buyouts in the hope that higher-level, and better-paid, employees will volunteer, making layoffs simpler. Receiving a big chunk of change may sound like a win. But if it won’t power you all the way to retirement, think twice. Remember, a full-time job is not just about the weekly paycheck: It also puts money in your 401(k) and provides health and disability insurance. If you have to buy these things on your own, it costs a fortune.

Tune out the stock market noise. Don’t obsess over day-to-day gyrations. Most experts believe that current stock prices already reflect economic bad news. That means prices could go up before other economic signals get cheery again. Don’t bail out at the bottom. And consider buying some favorite stocks while they’re cheaper.

Keep on keeping on. Crunch times can’t be an excuse for cutting back on 401(k) contributions or debt repayments. If you’re in your 20s or 30s, there’s some argument for taking a short break. But if you want to retire, reinvent your career, or make other big moves in the near future, take care of the basics first.

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