Expecting a recession? Here's how to prepare for it

There’s perception and then there’s reality. For many folks, the glass is already nearly half empty, while others feel it will be not too far in the future.

In a new survey, "Experts vs. Everyday Americans," Bankrate.com says 40 percent of the people polled say they feel the next recession has already begun or will begin within the next 12 months. Meanwhile, the experts say it will be at least a year before the downturn begins.

For sure, no one can know with any certainty when a recession might happen, but there are some trending thoughts. In a recent survey of economists, nearly half said they expected a recession in 2020, while 37 percent think it will come a year later, according to Brian Cohen, principal with Landmark Wealth Management in Melville.

As for him and his firm, “We agree with the overall consensus," on a looming recession. "It is almost a 50/50 bet that it would take place within 12 months.”

So, what should you do if the conventional thinking is right and a recession is likely in the next 12 to 24 months?

Pay down debt

As the market turns south, having a lower monthly “nut” of payments to crack, such as car loans, student loans, credit card debt and mortgage will be crucial. “Also, depending on the severity of the recession, you may need access to credit going forward. So pay down debt where you can,” says John Dinsmore, an associate professor at Raj Soin College of Business at Wright State University in Dayton, Ohio.

Build an emergency fund

Even under the best of circumstances, strive to have at least six months’ worth of living expenses socked away. If your income fluctuates because you are a commissioned worker, self-employed or a freelancer, your savings should add up to more like a year's worth, says Cohen.