Photo : Drew Angerer/Getty Images

If you’re like many Americans, the swings of the stock market aren’t necessarily keeping you up at night—only around half of us are invested in the stock market at all, and of that, “the top 10 percent of wealth holders in the United States own an estimated 85 to 90 percent of stocks,” according to the Washington Post. Rather, the thought of a weakening job market is what really matters to you. A dip in the S&P doesn’t mean nearly as much as your company laying off more workers.




While it’s hard to predict what will happen in the near-term, the good news is that the Federal Reserve, at least, expects unemployment to continue to decrease in 2019, rather than increase. But should the economy head south, what should you focus on in the next year to prepare your family’s finances, besides storing up some cash?


Jonathan Clements, founder and editor of the Humble Dollar, has a few suggestions.

Contribute to a Roth IRA

Financial experts love Roths, and if you qualify to contribute to one, there are a number of reasons you should do so, all outlined here. But as Clements writes, the economic uncertainty adds another wrinkle: Your Roth can be used as a sort of back-up emergency fund, because you can withdraw your contributions (just not gains) at any time without penalty. That means if you start contributing now and then lose your job and need funds, you can easily access some money, which you wouldn’t be able to do with a traditional IRA or a 401(k).

Why You Need a Roth IRA Much ink has been spilled on the relative superiority of Roth IRAs versus traditional IRAs, but… Read more

Pay Off Credit Card Debt

The Fed is raising interest rates, and that means any debt you have is getting more expensive (weird how credit card rates rise immediately, but not savings accounts rates, hm?). Paying off your debt should always be a priority, but it could become even more important should you lose your job and need to rely on your credit lines to float you for a bit.


Additionally, if you’ve taken a loan out of your 401(k), repaying it should be a top priority. If you don’t and you lose your job, you have to repay it or it will be treated as a distribution and you’ll owe taxes and fines.

Rethink Major Financial Decisions

If you’re worried about your job, now’s not the time to take on new financial obligations. “For instance, you might keep your current car for a few more years,” writes Clements. “If your job is at risk, this probably isn’t the best time to take on a car loan or use your spare cash to buy a new vehicle. What if you still have money owed on the last car you purchased?”




Likewise, take stock of your current obligations and see if there’s any way to downsize or make things easier. Maybe you could make a few extra car payments now to lessen the burden on yourself in the future, cut out cable or start shopping at a less expensive grocery store.


These are just a few of the small steps you can take to prepare yourself and your family for potentially difficult times. If you’re interested in more savings tips, we have some here and here.

This post was originally published on 12/26/18 and was updated on 8/14/19.