If you’ve been paying attention to the news lately, or if you’ve been looking at your 401k in the past six months, you might be worried about our economy. Newscasters have been warning of an impending recession, the stock market has been dropping… my 401k lost more than $10,000 just over a couple months. It can be scary, especially if you’re a millennial that graduated into one of the worst recessions we’ve ever seen.

So even though we can’t personally control the economy or prevent a recession, there are things we can do in our own lives. The steps below will protect you financially if we go into another recession.

So even though we can’t personally control the economy or prevent a recession, there are things we can do in our own lives.

Leave Your Money Alone

As I mentioned above, I lost over $10,000 from my 401k in the last quarter of 2018. Well, I shouldn’t say “lost”, because it will almost certainly recover over time. However, it sure didn’t feel good to see my balance drop that much after I worked so hard to save so much money. It can feel tempting in those moments to pull your money out of the stock market and put it somewhere “safe”. But that’s actually the worst thing you can do! The stock market is volatile. It goes up and down all the time. When you’re investing for retirement or other long-term goals, you’re in it for the long game. The most important thing to do is to leave your money alone and allow it to recover over time. That’s what I did and my 401k has already gained more than half of the amount that was lost last year.

If you’re closer to retirement age, then you do want to be a little bit more careful with your investments. You have less time for the market to recover, so you’ll want to have less of your money in the stock market and more in bonds and cash. A target date fund investment account can adjust this allocation for you automatically, but you can also work with a financial advisor to make sure you’re set up for success.

Build Up Your Emergency Fund

If I’ve learned anything from the recent government shutdown, it’s that even gainfully employed Americans are woefully underprepared for emergency situations. Of course, individual employees should not be punished for the inability of our government to operate properly, but that is what happened. Many of the furloughed federal employees were unable to pay their bills or buy groceries after missing two paychecks.

I’m not beating up on federal employees, because 40% of Americans would be unable to cover a $400 emergency expense. That means that almost half of us wouldn’t be able to support ourselves if the recession cost us to lose our job. This is why it’s so important to build up an emergency savings account. Start small and save $400. From there, build up your account to make sure that you have at least enough to cover all of your expenses for three months. If you have children or if you are self-employed, you’ll want to have more than that on hand. Having this account fully funded will not only give you peace of mind, but it will protect you and your family if something (like a recession) happens.

Talk to Your Boss

In order to maintain your peace of mind, or figure out if you need to find a new job, it’s important to know if your job is safe. If a recession is imminent, talk to your boss about the security of your position. This is especially true if your industry tends to be impacted negatively by an economic downturn. You’ll want to know if you should start applying for other jobs if there will be cuts or layoffs.

Make a Plan to Pay Down Debt

Debt payments can often be some of our biggest monthly expenses. They are also probably the most frustrating thing to pay when you’re struggling to pay your other bills and support yourself. Consumer debt, like credit cards, should take the top priority. This is especially true because typically, you can’t request to defer your credit card payments if you lose your job or come under some other kind of financial hardship. This is different from student loans, which you can defer in those types of scenarios. If you’re worried about a future recession, now is a good time to make a plan to pay down your debt. Review your budget and see if there is any extra money available that you can put towards your debt. Use an online calculator to see how long it would take you to pay off your debt with the amount of money that you have to dedicate to it.

Make a Backup Plan

If you work in a job or industry that can be impacted by an economic downturn, you might need a backup plan. This backup plan could be your emergency savings account, or it could be an alternative income source. What would you do to pay your bills if you got laid off or your business took a turn for the worst?

More resources on a potential recession: