While inflation is grabbing headlines and causing price increases on everything from fuel to food, the possibility of a recession is causing fears among politicians and consumers.
Earlier this month, Deutsche Bank said that a recession could take place as the Fed tries to rein in rampant inflation, with officials suggesting that interest rates could rise so aggressively that it could hurt the United States economy, according to CNN.
Amid those fears of continued inflation and a possible recession, consumers may be looking for advice on how to best prepare for tougher economic times.
To that end, CNBC Senior Personal Finance Correspondent Sharon Epperson spoke with NBC 5’s Marion Brooks to offer tips on how consumers can protect themselves.
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Epperson says that the tips can be used by anybody, whether or not a recession takes place.
“This is the time to focus on what you can control,” she said. “You cannot control what’s happening in Ukraine. You cannot control what the Fed may do to curb inflation. And you cannot control what’s happening in China.”
Reassess and Outline Your Financial Priorities
While planning for the future is always key, Epperson says that focusing on the here-and-now is key before embarking on any long-term strategies.
“What are your goals for right now,” she said. “You got to get the rent paid, you gotta make your car payments, you have to make sure that there’s food on the table (and) that you can provide for everyday living expenses.”
Get Rid of as Much Debt as Possible
Saving and setting aside money for emergencies and for retirement are both important goals to undertake, but never underestimate the importance of paying off as much debt as possible while rates remain low, Epperson says.
“The number one focus for most people should be on eliminating as much debt as possible,” she said. “As we’re seeing interest rates increase, that means the rate you’re paying on your credit card, the rate that you’re paying on your debt and on what you’re borrowing is going to increase. So you want to get rid of as much of that as possible.”
Plan for the Long-Term, Without Rash Decisions
As earning reports and inflation both cause serious volatility in the stock market, Epperson cautions that long-term financial planning requires patience and a willingness to ride through short-term setbacks in favor of prosperity in the future.
“(Be patient) when it comes to what you’ve already put away for the long-term, money that you don’t need for the next five years, 10 years or decades from now,” she said. “Yes, we are seeing some dips. Yes, we are seeing a lot of volatility. But this is money that you have for the long-term, so don’t sell at the low. That’s the worst thing you can do.”
You can catch Sharon Epperson on a variety of CNBC programs, or follow her on Twitter @sharon_epperson.