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<v Speaker 1>Let's say good morning now to the host of Money

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<v Speaker 1>on KFI. It's Joel lars Guard.

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<v Speaker 2>Good morning, Joel, morning Amy.

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<v Speaker 1>So the recession rumblings are getting a little louder. What's

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<v Speaker 1>the latest and how do we get ready for it?

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<v Speaker 2>Yeah, I mean, it's one of those words that gets

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<v Speaker 2>thrown around and people see it in headlines they start

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<v Speaker 2>freaking out a little bit. And interestingly enough that Golden

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<v Speaker 2>Sacks increased its recession odds twice in one week, so different,

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<v Speaker 2>you know, different financial firms are saying, hey, it's more likely,

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<v Speaker 2>just like putting this red flag up in the air,

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<v Speaker 2>let you know. And the truth is it is more likely,

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<v Speaker 2>right because of some of the governmental policy we've seen,

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<v Speaker 2>specifically tariffs, the likelihood that that hurts businesses and increases inflation. So, yes,

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<v Speaker 2>the odds of our session just have gone up. Clearly,

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<v Speaker 2>will we experience the recession? Are we potentially in one?

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<v Speaker 2>Right now? Maybe the truth is too that recessions happen

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<v Speaker 2>when you look at the data, something I every six

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<v Speaker 2>and a half to seven years, So it's not one

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<v Speaker 2>of those things where it's like this is a once

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<v Speaker 2>in a lifetime sort of thing. Recessions are kind of

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<v Speaker 2>part of how the economic climate and how economies work.

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<v Speaker 2>So recessions also shouldn't be this thing that just freaks

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<v Speaker 2>you out to no end. But there are certain things

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<v Speaker 2>that I want people to do in advance of a

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<v Speaker 2>potential recession, and just kind of personal finance hygiene in general,

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<v Speaker 2>like the emergency fund. That's a huge one. Especially right now.

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<v Speaker 2>Some people, and we can talk about this too, are

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<v Speaker 2>like pre buying more stuff because they're worried about prices

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<v Speaker 2>going up. I see the wisdom in that, maybe in

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<v Speaker 2>small bits and pieces for certain things that you were

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<v Speaker 2>going to buy anyway. But having if it means eliminating

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<v Speaker 2>some of that all important emergency fund and not having

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<v Speaker 2>as much in cash, well, if you lose your job,

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<v Speaker 2>you can't eat the stuff you just bought. So I

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<v Speaker 2>want you to make sure that you have a really

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<v Speaker 2>solid emergency fund, at least that three to six months

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<v Speaker 2>of expenses stashed in a liquid savings account.

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<v Speaker 1>Okay, and that doesn't count for like a what are

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<v Speaker 1>those short term things like a three month and six

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<v Speaker 1>month that you can't contact with a CD. Yeah, you

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<v Speaker 1>can't get your hands on it for a few months,

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<v Speaker 1>or can you do that one and if you have

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<v Speaker 1>to tap into it, you can you can.

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<v Speaker 2>Here's the thing I think, don't put money in a

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<v Speaker 2>CD that you might need. Right So, a CD can

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<v Speaker 2>be a great place for like medium term savings, but

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<v Speaker 2>when it comes to that emergency fund, you probably don't

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<v Speaker 2>want that in a CD. And if you have to

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<v Speaker 2>tap it early, it means you're going to give up

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<v Speaker 2>some of that interest. You would have been better in

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<v Speaker 2>a high old savings account with one of my favorite banks. Anyway,

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<v Speaker 2>something else I want people to do in advance of

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<v Speaker 2>a recession. I just want people to do this anyway,

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<v Speaker 2>is create something that I call a bare bones budget,

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<v Speaker 2>and it's essentially a budget that boils down what you

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<v Speaker 2>could get by on every single month. So it's the

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<v Speaker 2>bear essentials and nothing more. And I don't want people

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<v Speaker 2>to live on a bare bones budget in perpetuity. But

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<v Speaker 2>let's say you do lose your job or something comes

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<v Speaker 2>down the pike. The fact that you have created this

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<v Speaker 2>barbones budge and you know what you can cut and

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<v Speaker 2>you can kind of start to pair back almost immediately.

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<v Speaker 2>That just creates not only a financial backstop but in

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<v Speaker 2>some resiliency, but it also just helps you to realize that,

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<v Speaker 2>wait a second, maybe I am spending more than I

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<v Speaker 2>thought on some extra luxury items that I don't necessarily

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<v Speaker 2>have to have. And so to think that barebones budget

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<v Speaker 2>in addition to the three to six months worth of expenses,

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<v Speaker 2>and some financial folks out there are saying, oh, no,

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<v Speaker 2>you need twelve months worth of expenses. I think that's

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<v Speaker 2>just too much. I think most people one can't have

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<v Speaker 2>a hard time saving up that much. And then two,

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<v Speaker 2>that's overkill for most people when it comes to cash

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<v Speaker 2>on hand. But if you have those two things in order,

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<v Speaker 2>it's going to help you with if we do encounter

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<v Speaker 2>more trying financial times.

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<v Speaker 1>Okay, So the two takeaways is get that bare bones budget,

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<v Speaker 1>sit down, put the numbers down, figure it out so

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<v Speaker 1>you know, because that gives you power. Knowing what you

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<v Speaker 1>have gives you power. And then the other thing is

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<v Speaker 1>start stashing your cash because you want to build up

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<v Speaker 1>that emergency fund. That's right, just in case we might

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<v Speaker 1>not have a recession.

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<v Speaker 2>And that's the thing too, like we really might not.

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<v Speaker 2>And the other thing is a personal recession can happen

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<v Speaker 2>at any time. This is something I want people to

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<v Speaker 2>be well aware of, whether it's some sort of medical emergency,

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<v Speaker 2>or it's hey, I just work in a sector that

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<v Speaker 2>had a tough time. The American economy is booming. Unemployments

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<v Speaker 2>are four percent, but my personal job took hit and

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<v Speaker 2>I lost that right. So there's always the potential for

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<v Speaker 2>personal financial difficulties even when the economy as a whole

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<v Speaker 2>is doing well. So I think that's why I call

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<v Speaker 2>this like personal finance hygiene. I want people to practice

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<v Speaker 2>these things anyway, because hey, even if the economy as

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<v Speaker 2>a whole is crushing, there's always the potential, right that

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<v Speaker 2>your personal life experiences some sort of recession that the

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<v Speaker 2>other the rest of the economy isn't feeling all right.

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<v Speaker 1>Thee great advice as always, and you can hear more

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<v Speaker 1>great advice just like this and a whole lot more

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<v Speaker 1>every Sunday from noon to two on how to min

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<v Speaker 1>with our very own Joel Larsguard. You can follow Joel

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<v Speaker 1>at how to Money. Thank you so much for this

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<v Speaker 1>great information, Joel

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<v Speaker 2>You got it Amy, Thank you