Recession and Layoff Prep 2026
June 10, 2026
I probably know all this already, but I’m going through Jim Wang’s Recession Prep list anyway just in case I’ve missed anything.
Increase Your Emergency Fund. ✅ The usual guidance is 3-6 months but I lived through the Great Recession, so nope, I’ve always operated on a 12-18 month cash buffer. The monthly dollar amount was much lower about 8 years ago, though, so I had 15 months based on those numbers. I’ve now revised that up to use the current monthly dollar amount and recalculated – we have 12 months of cash or cash-like instruments.
Avoid Big Purchases. ✅ Define “big” was my first thought. Here he refers to car and house purchases. I was defining it as $100-300, so there’s a range. Cars: We have no plans to buy cars or houses. I do have a small maintenance fund for each, cars and house, to pay for smaller repairs, too. Both need beefing up, we can’t do anything major like install solar on it.
Renegotiate Your Debt. ✅ We only have the mortgage and the interest rate is under 3% so we are leaving this alone.
Add Income Diversification. 🚩 I’m feeling very YUCK on this point. We have some crafty things to do both for fun and money but they depend on sales and are unlikely to be a steady trickle of dollars. I keep looking at online leads and getting fed up when I see all the AIness of everything in every possible gig. Barf.
Keep Saving for Retirement. ✅ and 🚩 We’ve taken care of this for the year in our tax-advantaged accounts. I also invest separately for our retirement because of my lost investing time, but might have to put that on hold. I hate that part.
Be Realistic About Your Risk Tolerance. ✅ and 🚩 My investing style is Very Aggressive along with Buy and Forget it. Fidelity likes to neg me about this. But Fidelity also likes to neg us about our contribution rates being too low after we’ve maxed out a 401K so what do they know anyway. My current plan is not to use money from our portfolio until 2028, so for now, we’re leaving everything there alone. I need to set a date for re-evaluating that but that’s a later thing.
Start or Update Your Budget. 🚩This would just be refining the budget, for us. I haven’t quite got my head around how to trim our budget. We spend most freely on food, and then on fun experiences. We picked up a few museum memberships this year before the whole implosion so … we’ll make the most of those and then let them lapse.
Review Your Emergency Plan. ✅ I’ve been doing this review in chunks. I feel responsible! There are some bits that I still don’t have information for (like how long unemployment will last), but I have mapped out some key actions to take. The first day after my last day of work here will heretofore be referred to as G(ot)TFO day.
1. GTFO day: Apply for unemployment
2. GTFO day: Contact PiC’s employer to upgrade our vision plan and remove the working spouse surcharge. That will increase his take-home pay by a little bit after both things are reconciled.
3. GTFO day: Contact Fidelity to roll over my 401K. Do I want to stay with Fidelity or to roll it over to Vanguard?
4. GTFO day: Gleefully delete all the work related bookmarks that are saved in my browsers. Export an updated set of bookmarks for my records.
5. For the next 6 months: Monitor that they actually pay the severance correctly and on time. They have historically not been able to do either thing.
6. For the next ?? months: Stay on top of the unemployment requirements to continue getting paid.