I’m a Millennial Who Started My Career During the Last Big Recession. Here’s What I’m Doing to Be Prepared Now

A photo to accompany a story about life lessons from recessions Getty Images; Photo courtesy of John Puterbaugh
I started my journalism career during the Great Recession. I didn't know a lot about managing my money and made a bunch of mistakes. I've learned a lot since then and have a plan in case we are headed for another recession now.
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I’m getting big déjà vu vibes lately.

Recession. Corporate layoffs. A tightening job market and a housing market that’s out of control. As a millennial who started my career during the last big recession in 2008, this all sounds very familiar.

I started my first full-time job just a few days after graduating from college in May 2008. The U.S. financial system had started its epic meltdown a few months earlier, and jobs were hard to get. The Great Recession had begun. Many of my college newspaper colleagues had taken work outside of journalism, if they were lucky enough to get job offers at all. So I was thrilled to land a job as a daytime features copy editor for a small-town newspaper in Northern Illinois. 

I’ve been thinking about that time of my life lately, as I prepare for another recession that’s either already here, coming any day now, or “not inevitable” — depending on who you ask. 

I’m nervous, but I’m also hopeful and optimistic. I’m a millennial who made it through the Great Recession, after all, despite making a bunch of dumb money mistakes and knowing basically nothing about how to manage my finances. So if we must face another big recession, I won’t need to rely on dumb luck a second time. I’ll have the benefit of experience and the knowledge that comes with it.

It shouldn’t have been this way. With the pandemic’s worst days hopefully behind us, this year was supposed to be a celebration, not an economic calamity. But here we are: Battle-worn pandemic veterans facing a whole new challenge. To be clear, the pandemic was a tragedy of great magnitude, and today’s economic trouble is small compared to the millions of lives lost over the past couple years. And for the millions of people who experienced unemployment in the pandemic’s early days, every new story about layoffs is a scary reminder of how quickly things can change for the worse.

I helped launch NextAdvisor during those early pandemic days, when things felt similarly uncertain. I’ve realized these last couple years how personal finance is as much about empowerment as it is about budgets, income, and debt. It’s about understanding the tools and techniques at one’s disposal, to work toward goals and to plan for the unexpected.

So here’s what I’m doing right now, to feel comfortable and confident whether we are heading into another big recession or not. While the economy today is a lot different than it was in 2008, the things I’m planning to change (and not change) in my own financial life will give me peace of mind for whatever comes next.

What I’m Changing Right Now

I’m an action guy and I love solving problems, so my first instinct in response to the financial nervousness I’m feeling is to figure out what exactly I can do. A few things come to mind. 

Growing My Emergency Fund

The first thing I’m doing is boosting my emergency fund. My wife and I have two young children, and our emergency fund is enough to cover at least 3 months of bare-minimum living expenses. I’m planning to push that up to at least 4-6 months worth of expenses.

I didn’t have an emergency fund during the Great Recession, and now I can’t imagine not having one. I know saving is hard, and it’s even more difficult when you don’t make as much money as you’d like. My younger self would point out that it’s gotten easier for me as I’ve made more money. I worked in newspapers for 10 years, a profession that’s not exactly known for lucrative compensation. 

It wasn’t until a few years ago that I realized I was thinking about the emergency fund all wrong. Until then, the idea of some awesome, powerful stash of money for a rainy day felt about as realistic to me as winning the lottery. That was before I realized an emergency fund should start with an emergency budget

If you don’t have an emergency fund, you can take action right now by sketching out what your minimum monthly expenses would be (bye-bye Netflix, less eating out, stuff like that), and start stowing away whatever you can each week. I still have a phone reminder set for every Sunday evening to transfer $10-$15 to savings each week, because that’s how I started. Build it up over time to cover your minimum expenses for a month, then a few months, then even more if it would increase your comfort and confidence levels.  

While rising interest rates are making it more expensive to borrow money right now, they are also boosting the rates offered by high-yield savings accounts, which are a great place to build and store your emergency fund.

Cutting Back on Discretionary Spending

I’ve been known to make an impulse purchase or two. OK, fine, I’m basically coming out of the pandemic as a borderline problematic Amazon shopper. I like to buy what I want when I want, and sometimes I throw things in the cart at the grocery store without a second thought of the price and whether my family needs or even wants it. 

That’s going to change, because as much as I’ve enjoyed the privilege of buying things without a second thought, I’ve also unexpectedly lost a job before — a powerful experience I’m revisiting for motivation. A couple specific tactics I’m thinking about to make sure I am reining in my discretionary spending (which in turn will help me boost the emergency fund more quickly):

  • Forcing myself to wait a day on any nonessential purchase I want to make, to diminish my ability to make impulse buys
  • Discussing these purchases (however small) with my wife, to help me vet and better distinguish between truly worthwhile purchases and impulse buys I’d be better off skipping
  • Considering the “per use” cost of anything I buy — in other words, how frequently and for how long will I make use of a given purchase, as opposed to spending money frivolously on something I might use only once or infrequently

Helping Family and Friends

Unfortunately, I’ve already seen friends and family lose jobs to corporate layoffs in recent weeks. This, too, reminds me of the time I lost a job unexpectedly. Aside from the shock and fear of losing a job, the thing that stays with me the most from that time is how many people did whatever they could to help me get back on my feet. Even people I didn’t know before a random introduction was made. 

So I am making time to try and help people who already have been affected, as well as anyone who might find similar misfortune ahead. It could be as simple as a food delivery gift card or offering to share feedback on a resume or LinkedIn account. 

An unexpected job hunt is uniquely stressful and isolating, so I’ll be going out of my way to do what I can to help others in their journey. I’ll always remember those people who were there for me, and I know my help now will come back to me at some point in the future when I’m on the needing end of it. 

What I’m Not Changing Right Now

It feels good to take action, but I’m not trying to fix what isn’t broken either. Here’s what I’m not touching. 

My Investing Strategy

In case you haven’t noticed, the stock market has been a dumpster fire this year. 

The last six months have seen the stock market’s worst start to a year since 1970. Every week, the headlines tell the story of another low point. Perhaps you’ve even made the mistake of checking your 401(k) or another investing account for a custom view of how much money the latest low point has taken out of your portfolio. 

But get past these terrible headlines and there’s another, more helpful way to look at the stock market in proper historical context. There have been more than 10 recessions since 1950, and the stock market has recovered and then some every single time. In fact, the stock market’s average annual rate of return over the last 150 years is over 8%. 

I have a good 20 years before I plan to retire, so I’m not touching my 401(k), my Roth IRA, or even that old health savings account I picked up with a high-deductible health insurance plan a few years back. If anything, I’m planning to invest more in the coming weeks and months, since history shows us that investing during a recession or downturn typically yields stronger returns when we are on the rebound. 

I’m not even planning to sell or touch my crypto investments. (And if the stock market has been a dumpster fire, the crypto market has been a fire at the dumpster factory.) Of course, it helps that cryptocurrency accounts for less than 1% of my total portfolio. Who knows what happens there, but my favorite bit of expert advice on crypto investing has served me well so far: Invest only what you would be OK losing.

How I Use a Budget

My monthly budget is kind of like my financial toolbox. Or maybe it’s like my favorite screwdriver set — the one with 56 bits and attachments that plays a clutch part in every little house repair or DIY project. Whatever it’s like, my budget is where all my best money moves start.

Increasing my emergency fund and cutting down on discretionary spending are nice ideas. But my budget is the plan to make those ideas a reality. So I won’t be changing the way my family uses a monthly budget, even if the moves I make will be different as I plan for the unknown ahead.

There are many ways to create and use a budget, but the most important thing is to figure out a way that works for you. I use a custom Google spreadsheet. Whether you use an app or a spreadsheet or even a notebook, it’s worth some thought to figure out the approach that best fits into your life, and sets you up for success each month.

How I Use Credit Cards

I use credit cards for almost every day-to-day purchase, both for the credit card points and the extra security protection that comes with credit cards as opposed to debit cards. One important note here is that I never make purchases just for points, and I never make more purchases than I can pay off in full each month. 

If you have credit card debt, now is a great time to prioritize paying it down. Rising interest rates mean credit card APRs are likely to rise as well, increasing the amount you’ll pay for any unpaid balances that roll over each month. 

Since I never carry a balance on my credit cards, and enjoy the perks and points that come with using them, I don’t expect to change this aspect of my financial life. 

My Job

It seems like just yesterday we were talking about how employees had their pick of jobs in a market that heavily favored workers. Now we are talking about corporate layoffs that seem to be picking up pace.

I haven’t had any interest in a job change these last few years, but I find myself feeling even more committed to what I have as I see the job market start to shift back in favor of the employer. I like my job, my company, and my colleagues — along with the health benefits and steady pay that come with it. It would take a lot to lure me away in an increasingly shaky job market. 

Nothing is guaranteed and layoffs can come for anyone at any time. But if I were thinking about making a career change right now, I’d have to wonder how valuable I might be viewed at a new company compared to the one I’ve put in years of work at should economic conditions require tough decisions about workforce reductions.

Lucky Last Time, Prepared This Time

I started the Great Recession in 2008 by making one of my first big money mistakes: Buying a brand-new Macbook for about $1,000 as a college graduation gift to myself.

Except I didn’t really buy it — I financed it with my credit card. And I did that despite not having anywhere near $1,000 in my bank account. That $1,000 charge became the floor for my credit card balance over the coming years. Long after that computer stopped working, my credit card had a balance as high as $8,000. I knew it wasn’t great to have such a high credit card balance, but felt helpless to do anything about it. So I didn’t. 

I got lucky, skating through the Great Recession without ever really having to pay for that mistake or plenty of others. As layoffs ramped up across the newspaper industry, I not only kept my job but managed to advance in the field. And I never had to deal with any other surprise financial challenges that would’ve exposed my lack of discipline with credit card debt and minimal savings.

I was finally able to pay down all my credit card debt a few years ago, but I don’t even like to think about all the money I wasted on credit card interest over the years.

If there’s another recession, I don’t want to rely on luck again. I plan to be prepared.