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Economists say another recession could be ahead, here's what you can do to prepare your finances

A financial expert said this is the perfect time to take control over and set up your funds in case a recession does happen.

MEMPHIS, Tenn. — ABC24 is all about saving you money and with only a week into the new year, we have some advice about what you can do to set your finances up by making small changes to your budget.

There is still inflation, student loan repayments are also expected to start middle of the year, and economists even say we could be heading into another recession.

Yrefy Managing Partner Mary Jo Terry said this is the perfect time to take a look at your finances, so you know where you stand.

The first step is to look at your budget.

“There is online applications, there is apps that you can download onto your phone that are very simple to actually track your spending,” Terry said.

This means you should take a look at what is a necessity versus a want.

“If you have existing services like cable as an example or other internet services, pick up the phone and call them,” Terry said. “If you’ve been a long-time customer with them, there’s probably loyalty programs. They don’t want to lose you as a customer, lets see if we can get some money taken off your bill.”

The same goes for your phone bill and if you have streaming services, Terry said if you can, consider bundling them. Also, for your electricity bill, ask about the different payment options.

“For some of us, we just get the bill and pay it every single month and depending on where you are in the country, that bill goes up or that bill goes down, so take a look to see if you can even that out, so that you can actually budget every single month,” Terry explained.

If you have any variable rate loans that are personal or private, Terry recommended that you see if you can refinance and do a fixed interest rate instead.

“Right now interest rates are going up, and we don’t foresee them going down anytime soon, so that’s going to be incredibly important to see if we can get you into a fixed interest rate,” Terry said. “We can always refinance later, but at least you would know what your monthly payment is and it makes it much easier to budget.” 

Lastly if you have credit card debt, Terry said write down the balance, and interest rate because you will want to pay the highest rate off first.

“January is a big month where they offer you 0% interest or .03% if you transfer. See if that makes sense. They charge you a fee to transfer that over, but it may make sense if you’re paying a substantially high interest rate to temporarily put all those cards together.”

Please note that if you do that, you absolutely must focus on paying them back, and the card that you transfer the money from, go ahead and put it out of your sight.

And aside from couponing and shopping the discounts, Terry mentioned budgeting many times. 

She said jot down absolutely everything you spend your money on for the next two weeks and then go back and see if there is anything you can get rid of. Even saving $20 per month can go a long way.

Finally, Terry said create an emergency fund with at least three months with the ability to pay your mortgage or rent.

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