Half of Americans Say They’d Lose Everything in a Recession: Here’s How To Be Prepared

Half of Americans Say They’d Lose Everything in a Recession: Here’s How To Be Prepared

Gabrielle Olya   Wed, March 8, 2023

While economists are having trouble predicting if and when a recession will hit, many Americans believe one is inevitable. Three-quarters of Americans (75%) worry there will be a recession in 2023, while 69% say one is already here, according to a new Real Estate Witch poll.

Even more alarming, more than half of Americans (55%) said they would lose everything if a recession occurred.

“Although the job market is strong and wages are rising, many Americans are at risk financially simply because the cost of living is rising faster than income,” said Jaime Seale, data writer at Clever Real Estate. “That causes Americans to dip into savings, retirement accounts or lean on high-interest credit cards. Once in debt, that can make it more difficult to get back on track financially.”

On a positive note, the majority of people (87%) said they are taking steps to prepare for a possible recession. Here’s a look at the ways Americans are prepping for an economic downturn — and which ways are the most effective.

Saving More Money

The majority of people (44%) said they are saving more money to prepare for a recession, which is a smart money move.

“One of the best ways to prepare for a recession is to put savings in an emergency fund to cover three to six months of expenses,” Seale said. “Americans should be able to draw from this account immediately if they lose their job or have an unexpected emergency.”

Having an emergency fund can help people stay out of debt, which is particularly important during a recession.

“Interest rates tend to rise during a recession,” Seale said, “and, if consumers have a variable rate, like on many credit cards, they could pay hundreds or even thousands of dollars extra each month, putting even more pressure on their finances in tough economic times.”

Other measures Americans are taking to prepare for a recession include cutting back on non-essential spending (44%) and taking on additional income (32%).

Paying Off Debt

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