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We can’t predict when, but we know another recession will happen. These five purchases can make riding a recession out in relative comfort easier.
While some experts were sure the U.S. would be in a recession by the end of last year, the predicted recession did not appear. Before we get too giddy, though, it’s important to remember that there will be another recession — at some point.
Recessions are an unfortunate part of the economic cycle. Whether a recession arrives this year or several years down the road, it pays to be prepared. These five purchases can make it a little easier to weather the economic storm of the next recession.
1. Personal goods
Remember during the COVID-19 pandemic when people tussled over toilet paper at their local Sam’s Club and Costco?
There was nothing fun about it, and if you’d like to avoid a repeat of the issue, you’ll also want to stock up on all those items none of us will be able to give up, even during a recession. This includes toilet paper, shampoo, deodorant, toothpaste, and other personal care items.
2. Pet food
Unopened dry dog food has a shelf life of 12 to 18 months, and according to PetMD, a can of unopened dog food can last for years. Look for online and in-store sales on pet food and pick up extra when the price is right. Be sure to check the expiration date before making the purchase.
3. Side hustle supplies
Think of a hobby you enjoy, then decide if it’s something you can transform into a side hustle during the next recession. Whether it’s woodworking or crocheting, consider ways to bring in extra income if finances become challenging for your household. A side hustle may not make you rich right away, but it can likely put extra money in your bank account each month.
Returning to the topic of inflation, the supplies you usually use for your hobby will carry a higher price during a recession. Keep your eye out for sales and stock up when a great deal comes along.
4. Generic products
If you’re unfamiliar with generics, you’re in for a treat. Many are made by big-name companies but packaged by the retailer that sells them. Better yet? On average, generic and store-brand groceries will cost you a whopping 40% less than the brand names you’re more familiar with.
Why not pick up a few new generic products each week and test them out at home? That way, you’ll have a short list of the products you enjoyed when a recession does arrive.
5. Stocks
There is no such thing as a “recession-proof” stock. However, some stock market sectors have historically held their own during past recessions. They include:
Healthcare: People can save money by eating out fewer times a month and going to the movies less often, but if they’re sick, they’ll still need medical care. That’s why stocks like CVS Health, UnitedHealth Group, and Pfizer have done well, even as the economy goes south.Consumer staples: Another thing people can’t give up is food. Even if we eat hamburgers instead of steak, we must buy food. Stocks in companies like Tyson Foods and General Mills have proved to be good investments in the past.Utilities: Unless you live off the grid, you’ll still pay for electricity, water, natural gas, and trash collection during the next recession. Why not look into stocks like American Water Works, Waste Management, and NextEra Energy before a recession arrives?
I’m not suggesting that the companies listed here won’t get hammered by the next recession. What I am saying is there is money to be made, even during recessions. Before you do anything, though, do your homework. Read everything you can find about any company you’re interested in, and determine if it’s an investment you want to hold for years to come. Then, speak with your financial advisor about the wisdom of making an investment move.
The tricky thing about a recession is that the “signs” aren’t always as straightforward as we might hope. Perhaps you can set an alarm for yourself. For example, you may decide to pick up extra items when industries across the country are cutting jobs or other key indicators of a pending recession pile up.
As painful as each recession is, they don’t last forever. Since 1900, the average recession has hung on for 15 months, each followed by an extended period of growth and prosperity. The goal is to ride out those months in the most comfortable position possible.
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