Suze Orman Says to ‘Hope for the Best, Plan for the Worst.’ Here’s How

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It pays to follow her advice. 

Is a recession going to hit in 2023? It’s hard to know.

On the one hand, the job market is very strong, and the national unemployment rate is low. On the other hand, the Federal Reserve is not by any means done fighting inflation. In the coming months, it might raise interest rates aggressively in an attempt to bring living costs down.

If the Fed makes it too expensive to borrow, whether in the form of a credit card balance, home equity loan, or personal loan, consumers are apt to start cutting their spending. If that happens to an extreme-enough degree, we could end up with a recession on our hands.

No one is more aware of this than financial expert Suze Orman. In a recent blog post, Orman told readers to hope for the best and plan for the worst.

Now to be clear, Orman doesn’t have a crystal ball, so she, like the rest of us, can’t say with certainty what direction the U.S. economy is headed in. But, as she writes, “There is a lot going on right now that suggests 2023 could be financially shaky.”

That’s why she’s asking consumers to be both optimistic and prepared. And she specifically recommends making these key moves to gear up for an economic downturn.

1. Boost your emergency savings

Do you have enough money in the bank to cover a full three months of essential bills? If you don’t, then you may want to focus on building more savings immediately.

If a recession hits, it could lead to an uptick in unemployment rates. That doesn’t guarantee you’ll lose your job, but it’s a possibility. And if your paycheck goes away, you’ll need money to pay your bills until you’re hired elsewhere.

In fact, three months’ worth of living expenses is really the minimum amount of money you should keep on hand in your savings account. If you’re able to get closer to the six-month mark, you’ll buy yourself all that much more protection.

2. Do an outstanding job at work

Being great at what you do won’t guarantee that your job won’t land on the chopping block if your company is forced to reduce its staff. But think about it — who’s your company more likely to let go? The people who come in every day and do the bare minimum, or the people who work hard and get results?

It’s in your best interest to propel yourself into the latter category. So keep boosting your job skills and working your hardest while you’re on the clock so that if layoffs become necessary, you’ll have a greater chance of being spared.

3. Grow your network of professional contacts

When you need a job, who you know is often more important than what you know. Now, says Orman, is a good time to grow your professional network. You never know when you might need to call in a favor, so go out and establish those relationships before things get worse.

Ideally, 2023 will end up being a stable year, economically speaking. We could even see inflation cool off nicely. But at this point, we can’t really make any spot-on predictions about the coming year because there’s just so much uncertainty to grapple with. So your best bet is to hope that the economy remains solid, but to prepare in case the opposite happens.

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