- June 24, 2022
- Posted by: Bastion team
- Category: World News
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While the possibility of a recession has left many Americans feeling uncertain about their finances, most financial experts agree on one key piece of advice to prepare for an economic turndown: pay down as much debt as possible.
Paying down debt is always an important step to take, but when a recession looms, doing so holds even more power than you might think.
“In general, recessions are characterized by lower economic growth and higher uncertainty. Since both of these things typically cause higher unemployment and lower income, recessions make us defensive in the way that we think about money, reducing our spending and driving us to protect our savings,” says Katherine Salisbury, co-founder of Qapital, a popular finance app. “Jobs and business income are in greater jeopardy, and we try to give ourselves greater slack so that we can be prepared for a variety of negative outcomes.”
Select asked Salisbury to weigh in on the reasons why financial experts say to pay down debt in order to prepare for a recession.
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