According to fresh data from the Duke University/CFO Business Outlook, 48.6% of U.S. chief financial officers say the U.S. economy will be in recession by the end of 2019, and 82% say the U.S. economy will be in recession by 2020.

“The end is near for the near-decade-long burst of global economic growth,” says John Graham, a finance professor at Duke’s Fuqua School of Business, and lead analyst on the CFO survey. “The U.S. outlook has declined, and moreover the outlook is even worse in many other parts of the world, which will lead to softer demand for U.S. goods.”

Under either of the two above scenarios, the silver lining for U.S. financial consumers is they have ample time to prepare for tough economic sledding. The goal is to use that time to prepare for a recession with some specific personal financial moves that, once accomplished, should largely insulate you from a potentially nasty economic recession.

No doubt, there are those that believe it’s all sunshine with the economy right now, and that there’s no need to prepare for an oncoming U.S. recession.

“You can make the argument that Americans should always be preparing for a recession because there are too many factors involved which can cause one to come about,” says David Bakke, a financial analyst at Money Crashers, a personal financial advice platform. “Some of these are foreseen (and manmade), but others are unforeseen.”

“The thing is, your money is something that is too much of an important asset not to protect, so it always makes sense to be vigilant.”

Moves to wall off a recession

Bakke says that Americans need a Swiss Army knife approach to prepping for tough economic times.

“If a recession should happen, there are several things Americans can do,” he says. “One is to get on a personal budget and reduce expenses as much as possible. Then, cut back on discretionary spending, most notably entertainment and travel. Save that for when the economy evens out.”

Bakke also advises slashing credit card use and paying down card balances. “In addition, bump up contributions to accounts like 401(k) plans and IRA accounts, so you’re protected down the road if a downturn comes about,” he says. “Those are just the basics – more extreme measures might be necessary depending upon the severity of the downturn.”

Here are some other, equally important moves you can make to prepare yourself financially for a recession:

1 – Don’t try to “time” the market.

Trying to figure out when the market will crater or when it will recover is a fool’s errand, says Robert R, Johnson, Robert R. Johnson, professor of finance, Heider College of Business, at Creighton University. That’s particularly the case with a potential recession on the horizon.

“Many people believe that preparing for recession means selling stocks and raising cash,” Johnson says. “But remember the old Wall Street adage ‘Time in the market is more important than timing the markets’ is a universal truth.  None other than the late Vanguard founder Jack Bogle is quoted as saying on market timing — ‘After nearly 50 years in this business, I do not know of anybody who has done it successfully and consistently.’”

JP Morgan Asset Management’s 2019 Retirement Guide provides some data on the effect of market timing, Johnson points out.

economic downturn, recession
Unsplash/Aditya Vyas

“Looking back over the 20-year period from Jan. 1, 1999, to Dec. 31, 2018, if you missed the top 10 best days in the stock market, your overall return was cut in half,” Johnson says. “Fully invested in the S&P 500 for that 20-year time period, the return was 5.62%. If you missed the ten best days the return was 2.01%. Miss the 20 best days and the return was negative.”

According to Johnson, the best investing strategy “is to determine a long term target asset allocation and to stick to it whether the market goes up, down or sideways.”

2 – Don’t incur debt

For starters, avoid taking out any additional debt, especially big-ticket purchases on things like cars and homes, says Joshua Hastings, founder of the personal financial website, MoneyLifeWax.com. “During a recession, one of the easiest ways to bounce back or even progress is to make sure you have minimal debt.”

While a debt-to-income ratio score is typically used for purchasing a home, during a recession you want to approach the 10% level if possible, Hastings adds.

“Start by setting a small goal to pay off your debt over the next 12 months and make an internal pact to not take out anymore,” he says. “Additionally, having less debt means you have more money to use in other critical areas.”

3 – Pretend your salary is lower.

Hastings also advises playing “make believe” with your income.

“Try to live on a budget like you are worth $5,000, and not $50,000,” he says. “While this might seem ridiculous, it isn’t a bad idea to get used to living below your means. In the best case scenario, you save some money in the process, you pay off some bad debt and there is no recession.”

4 – Start – or add to – an emergency fund.

“If you don’t have an emergency fund, start one, advises Ron Auerbach, an educator who has taught finance at both the high school and college levels.

“It’s money that you’re setting aside for a rainy day to help you get by when things turn bad,” he says. “It’s also not money you’re touching unless you really must. It’s money to help you ride out the bad times and survive.”

According to Auerbach, a general guideline is to have at least three to four months’ worth of money to cover expenses. “Six months is even better,” he adds. “And if you can have six months to a year or more, you’re in an even better position.”

If you already have an emergency fund, add more to it, Auerbach says. “You really cannot have too much because we just don’t know how long the bad times will go on,” he says. “The economy is influenced by so many things, predictions about where it’s heading and the magnitude of things can easily change.”

5 – Act like a recession is coming.

Whether a recession occurs or not, it’s always a good idea to manage your money like tough economic times are on the horizon.

“As much as we want it to, economic growth and expansion won’t continue on indefinitely,” Auerbach says. “Thus, we will always be going through cycles where there are periods when things improve and other periods when things get worse.”

“You just cannot afford to be caught by surprise because you failed to plan ahead,” he adds. “So planning ahead, months, even years in advance, is a wise move.”