22. How to Plan for a Recession

June 2, 2022

The following article may contain affiliate links or sponsored content. This doesn't cost you anything, and shopping or using our affiliate partners is a way to support our mission. I will never work with a brand or showcase a product that I don't personally use or believe in.

The following article may contain affiliate links or sponsored content. This doesn’t cost you anything, and shopping or using our affiliate partners is a way to support our mission. I will never work with a brand or showcase a product that I don’t personally use or believe in.

How do I prepare when the economy is unstable?

If you’ve tuned into the news recently, you’ve seen a slew of panic-inducing words like:





And on and on and on.

We’re not negating that any of these things are happening, we’re stone-cold sober in our approach to our current economic climate –– which is why we decided to record this episode. In today’s episode, Tori gently guides you through a plan to recession-proof your finances and gives you a pep talk about why you shouldn’t be overly worried about what the stock market is doing right now and why.

This is an important episode that’s equal parts advice and financial big sister encouragement. We’ve also created an entire section of free resources for money to help you manage your stress levels.

P.S. If you’re ready to finally start investing, or maybe you’ve opened an account, put some money in, and then thrown up your hands in frustration over the next steps, our one-of-a-kind investing community, Treasury, might be for you.


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Tori (00:00):

Hello. Hello, Financial Feminists. Happy June. I’m so excited to see you back. Thank you as always for your support of the show. It’s been so cool to come back and start releasing episodes again, and to see you all still here and all of you still engaged with the show and excited to learn more about money and excited to have these conversations. And I just so appreciate your support and I hope you’re learning a lot. We’re so excited to keep bringing you content we’re excited about and content that helps you improve your financial life. I will tell you something very random that’s happening for me personally in my life. Do you guys remember the song Makes Me Wonder by Maroon 5? Do you remember that random song? God, it had to have been like 2011, 2012. I’m literally going to Google it right now. I’m going to Google when it came out.

Tori (00:51):

I want to say it was yeah, like 2011, maybe 2010. Oh, just kidding. It was 2007. It was even earlier. If you guys don’t remember this song, I don’t know why, but this song has reappeared in my life. I cannot stop listening to it. Like I listen to it when it came out. I know all the words. I knew all the words when it came out and for whatever reason, right now it’s such a bop. And every time it comes on, I fully laugh out loud going, are we about to listen to the song again? And my brain goes, yes, we are. There’s something about the guitar and like the bass groove. It’s so good. Oh, it won a Grammy. It won the Grammy award for best pop performance by a duo or group at the 50th Grammy awards. Well, there you go. Anyway, it’s popping.

Tori (01:46):

It’s a great fucking song. So if you haven’t listened to the song Makes Me Wonder by the American classic rock band, Maroon 5, go check it out. It’s just, I can’t get enough of it. Don’t know why. If you are enjoying the show and if you want to see more of it, we are actually releasing video of our podcast recordings on YouTube. There’s a link in the show notes and you can see sometimes up to like 10 minutes of each episode on YouTube. See, not only me, but also see our guest. And a lot of times we’re in person recording in the studio. So if you want more content, if you want to be able to see us actually talk. I know for some people that’s lovely as you don’t just want to hear our voices, but also see us. If you go to YouTube and search Financial Feminist or search Her First 100K or go to the link in our show notes, you’ll find a bunch of videos there.

Tori (02:38):

We’re excited to continue doing some YouTube content. All right, today we are lovingly kicking off what we call hashtag stock girl summer here at Her First 100K and I could not be more thrilled to share some really exciting investing episodes in a couple weeks. This term hashtag stock girl summer was coined at our investing 101 workshop, which is the first step into our one of a kind investing community called Treasury that I co-created. We launched Treasury earlier this year to create a space for women to become investors. We provide education and community in a new way to view both your portfolio, what you’re investing in, but also what I’m investing in. If you’re curious, what sort of funds or stocks I own, you can see that in Treasury. Our community has already invested almost $17 million. And most of that money is by first time investors. So we have a link to Treasury in the show notes, head to treasury.app to learn more. Would love to see you there for hashtag stock girl summer.

Tori (03:35):

Before we dive into hashtag stock girl summer, tweet it. I beg of you. We’re not doing hot girl summer this year, we’re doing rich bitch hashtag stock girl summer, right? We’re making it happen. We are becoming financially educated. We’re growing our wealth. So before we delve into the beautiful, lovely, exciting parts of hashtag stock girl summer, we’ve got to talk about what’s currently happening in our world, in really the financial world. If you follow any sort of money or financial news right now, you’ve seen the words inflation, crash, recession, probably more times than you’d like. And it seems like it’s just getting started. Literally an article came out just this morning as we’re recording, calling this the, “Summer from hell for investors.” Okay. First of all, this is something that is so important to highlight. This is going to make this episode worth listening even if you stop right now.

Tori (04:32):

I need you to remember that journalism is important, but journalism, especially online journalism, they’re there to make money, right? Just like any other place, because we’re under capitalism. So when you think about clicking on an article that has a click baity headline or like a panic inducing segment, what they’re really trying to do is they’re trying to get to click and never stop clicking because it gets eyeballs on their pieces. It helps them make money. So when you’re thinking about all of the financial media telling you to panic, they’re trying to make you feel a certain way. It really affects us emotionally. So when you see headlines calling it, “A summer from hell”, or threatening a crash or recession or talking about how the stock markets at a all time low for the last two years, I need to remind you of a couple things.

Tori (05:27):

Again, number one, news organizations, especially around financial news right now are doing a little bit of fear mongering. And I honestly just avoid those kind of articles because they spike my anxiety. And they’re often just pulling one specific stat without talking about how that stat affects everything as a whole. Because if you look at, for example, the stock markets at an all time lower the past two years, right? If we were to see that sort of headline. What they’re not telling you is that the stark market as a whole has been at an old time high for like the past 12 years, it’s only continued to climb. So even if it might be at a low for the last two years, we’ve still been on an upward trend and it’s not necessarily a bad thing, right? Because if it’s an all time low of the past two years, but we’ve been at an all time high for 12 years.

Tori (06:20):

Well that’s a little sus, right? So that’s the first thing is just, if you know it’s going to spike your anxiety, I’m not saying you never check the news again, right? We need to be informed consumers. I’m not saying you lock yourself in a, I don’t know, like you move to rural Alaska and lock yourself at a cave and you never do anything. Like that’s not what I’m saying. It’s more just be a smart consumer of media and make sure that if they’re trying to get you to have an emotional response, understand that they’re trying to get you to have an emotional response. The second thing, a recession is coming. That’s not fear mongering. A recession is coming. We will see a recession. You will see many recessions in your lifetime. That’s what’s going to happen.

Tori (07:12):

You will see big one day crashes. You’re bound to see multiple crashes sometimes with even the same two decades like we’re seeing now. There is going to be a recession. And we just don’t know when and anybody who’s telling you that they know exactly when a recession’s going to happen or they know exactly when the stock market’s going to go up or when it’s going to go down are lying to you and, or trying to sell you something. I am an investing expert, right? I am a globally recognized financial expert. And I cannot tell you not because I’m not smart and not because I don’t have the experience, but because I, and everybody else cannot tell you what the stock market’s going to do day to day. I have no idea. I can tell you that it is going to go up and it’s going to go down.

Tori (07:58):

There’s going to be all time highs and there’s going to be all time lows. And that’s the one thing that’s predictable. The third thing is that if you’re investing with the long term in mind and diversifying your portfolio, you will be able to weather these storms. You will be able to work through a recession and work through the all time highs because the definition of the word invest is to put energy, money into something for a long period of time, right? When you invest in yourself, you don’t expect an immediate outcome. You’re going to, again, we’ve talked about this a million times. If you go to the gym once amazing, but like you don’t expect to look like fucking Dwayne, The Rock Johnson after one gym visit. If you go to therapy once, you don’t expect your anxiety to magically go away after that one therapy session. It’s the same thing with investing.

Tori (08:50):

You’re putting time and energy and money into something expecting a worthwhile result after a significant period. And so with this episode, we’re going to talk specifically about how to prepare for a recession, whether you are investing or worried about the stock market. And we’re also going to help you try to have a financial plan in case of something like increased pricing, which we’re seeing with inflation, increased layoffs or some other unplanned event. I will say right off the bat, recessions are really scary. They are. I saw the impact that happened in 2008 and I was in eighth grade. So I have yet to be an adult in a recession. I have yet to have my own money and have my own financial life as a person during a recession. They are scary, but this is why these sorts of communities at Her First 100K, with the Financial Feminist Podcast, this is why these sorts of communities are so important.

Tori (09:45):

One, to get really good information from people you trust, to get information that isn’t fear mongering that is focused on long term stable choices. But the second, to feel like you have a supportive community that you can come to and express these fears without shame or judgment, and to be able to talk to other people. That’s why we built Treasury, our investing platform. That’s why Her First 100K exists. So during times of both wins and not so much wins in your financial life, we’re here for you every step of the way. Let’s define a recession. A recession is defined as a period of temporary economic decline during which trade and industrial activity are reduced. This is generally identified by a fall in the GDP in two successive quarters.

Tori (10:32):

So in millennial English, this means that for at least six months or two quarters of the year, there’s a decline in the stock market in the general like trade and activity, right? And in the gross domestic product, the GDP. I’ve already mentioned that we had a recession. The most recent recession was back in 2008 as part of the housing bubble popping. And one that we might be seeing this summer, but one that we will see eventually is likely a result of the pandemic and the compounding effects of the pandemic. It’s important to understand what’s happening so that you don’t have to fear it, that it doesn’t feel scary. I’m not really worried about my portfolio or the stock market or my investments. And I’ll tell you why in a moment, but first I want to share a voicemail from one of our listeners to illustrate why.

Speaker 2 (11:21):

My question is, well, first of all, I’m 47 year old single mother of two. And I really appreciate all the advice so far. I could tell you some wonderful things I’ve done because of you. But let me get to my question. All these years, you hear things like, oh, I lost it all in the stock market crash. But my understanding is that once you buy a stock, you own it. So even if you buy a stock at say a $100 and it drops all the way down to like 20, don’t you still own it? And then if it rebounds and goes to 150, then you have ended up making money. I don’t understand how people, “Lose everything,” if they still own stock in that company. I understand that some of the companies go out of business and then yes, you don’t get like a refund, but if I buy a stock and I just hold onto it, even though it fluctuates, don’t I benefit when it comes back? That’s my question. Thank you so much.

Tori (12:16):

I love this voicemail for a couple reasons. Let’s break this down. So back in 2008, when people, “Lost it all,” it was in two ways. One, through the housing market crash, it was people buying homes that they couldn’t afford. And two, they lost their money in risking investing strategies like day trading or timing the market, meaning that they were trying to figure out when the stock market would go up and then taking all their money out when it would go down. The only way you can quote, lose it all in a recession when it comes to the stock market is by selling your investments for a loss. This means that when the stock market dips or when stocks or funds are at a lower price, your panic selling all of your investments in hope of cashing out before the bottom hits. But here’s the thing, I have said this so many times. When you’re thinking about investing, you’re doing this for the long term.

Tori (13:13):

And if you are investing largely for retirement, and retirement’s a long ways out for you, you’re not going to need to access that money anytime soon. You have not lost money, unless you sell your investments. Just like you have not made a profit unless you sell. I want to say that again. So clearly. You have not actually lost money on the stock market unless you sell your stocks. You have not actually lost any money unless you choose to liquidate. At the same time, you actually haven’t gained any money unless you sell again. So when you’re thinking about all of this fear mongering that the financial media does, checking your stocks and seeing them down, and you’re like, holy shit, I’ve just lost all this money. You actually haven’t. And you especially haven’t when you consider that the stock market will rebound.

Tori (14:07):

I’m going to tell you a stat that we talk about more in Treasury when we do our workshops, that’s going to blow your mind. If you are taking notes, if you are somewhere where you might be a little distracted, I need you to like turn off those distractions and just listen to me very clearly for one second. If you put your money in the stock market for only one day, meaning you buy a fund today and you sell it tomorrow, the historical odds of making money are 50%. So you have a 50% chance you’ll make money. You’ll have a 50% chance that you’ll lose money because again, you’re buying and then you’re selling. You are as likely to make money as you are to lose money. But if you hold your shares for a one year period, your odds of making money increased to 68%. Over a 10 year period your odds of making money increase again to 88%. And if we invest for the long term for 20 years, this raises your prospects of making money to 100%.

Tori (15:08):

It is 100% confirmed in the 125 years of stock market data that you will make money. So if you invest and you ride it out for two decades, you will not lose money. During every single 20 year period yes, even during 2008, even during 2009, even during that recession, you have made money during those 20 years. The answer to not losing your money is patience. If you’re scared of losing your money, if you’re scared, long-term investing is the answer. Long-term investing, steady, patient, consistent, does not lose. It never has. So my advice when you’re managing your investments, especially if your investments are down, don’t look at it. This is in complete contrast to everything I teach about looking at your money, right? This is completely different than that whole episode, I think episode 11, that I talk about financial self care, right, about looking at your money.

Tori (16:15):

But not looking at your investments during a time of instability is so helpful to your anxiety and is only quote unquote allowed, I’m only giving you permission to do this, if you are still consistently investing. And if you have a plan already put together. This is not an excuse to like completely say, like fuck it. I’m never going to look at my money again. Right. That’s not it. It’s more just like if you know, especially that your anxiety is just going to get the best of you and you’re going to want to make a rash decision, not looking at your investments might be the right move, as long as you already have a plan that’s being executed.

Tori (16:55):

I don’t look at the stock market every day. I don’t look at it every other day. I maybe, maybe look at it once a week. And again, I’m an investing expert. I don’t really look at it all the time, because what happens on a random Tuesday, what happens even in a year, a random year, doesn’t really matter over decades. And in fact, a recession or a time where the market’s down is actually a potentially a great time to purchase your investments because it’s almost like they’re on sale. Investments will rise again. And you’re likely to see your investments start to trek upward eventually, especially if you’re investing in something like a diversified index fund. Again, we talk more about index funds, we talk more about how to choose investments through Treasury. So when you’re thinking about managing your investments, looking at them, keeping track of them during some instability, during some volatility, as long as you have a plan together and you’re executing on that plan, it might be okay to just not stress out, just not look.

Tori (18:00):

So what about outside of the stock market? What about outside of investing? What can we do to make sure that we’re secure in times of uncertainty, in times of volatility? The first thing I need you to check in and make adjustments to your emergency fund. If you need more information about emergency funds, if you want more info about them, episode five called the financial game plan. It’s also called where do I start? Episode five is the one you want to go back to. Episode five and this episode are going to be your like beacons of light at the end of a potential volatility tunnel.

Tori (18:37):

So if you are stressed, these are the two episodes to come back to. We talk a lot in that episode, of course, about the importance of an emergency fund. It’s even more important during times of volatility. It might be time right now to add an extra month or two of savings just in case. You also need to make sure it’s in a high yield savings account. So it’s not just earning like 0.03% in interest, that it’s working at least a little bit harder for you. And you also need to make sure it accounts for what you need with any new prices, new costs, if you’ve moved apartments, and now your apartment’s more expensive.

Tori (19:14):

I’m recording this in New York right now. And I have so many friends whose rent is going up. It’s importance, right, that your emergency fund reflects that. Three months of living expenses for you five years ago might not reflect three months of living expenses now and just inflation. Everything’s going up. The price of a gallon of almond milk is going up. So make sure that your emergency fund actually does account for what your monthly expenses are currently. So again, one we’re checking in, we’re making adjustments to our emergency fund, we’re padding our emergency fund if you’re able. The second is you need to check in and make adjustments to your budget. I need you to cut things that you don’t need or use. Get really honest with yourself about the things that you’re maybe paying for, but not getting the full value of. Subscriptions you forgot to cancel. For me, it was like I had a membership to like an online fitness thing and I forgot I was paying it and found it a couple months ago.

Tori (20:09):

I was paying for it for like five months and didn’t use it at all. Cut things you don’t need or use. Make sure you know what your bottom line number is for monthly bills. I call this your ramen noodle number, the bare minimum amount of money that you need to be making in order to cover your ass. This is probably also your month’s worth of living expenses that you’re banking or you’re deciding your emergency fund around. So make sure you know what that bottom line number is, make sure you know the ramen noodle number, the minimum amount of money that you need to be making in order to cover your bills. You also want to make note of any non-essentials. I don’t want you to cut these things. We hope you never have to cut these things, but if shit really goes down, if shit really hits the fan, now you have a plan and you know exactly what to cut from your budget first, the things you could live without.

Tori (20:57):

The third thing we’re going to have you do is negotiate your bills. It is never a bad time to do this, regardless of how the stock market’s going or regardless of what economic state the world’s in. You can call up your loan provider, whether that’s your student loans, your car loans, your credit card companies, see if they can offer any sort of deferment and adjusted payment plan or even lower your interest rates. We have an amazing affiliate partner called Juno that helps you get a lower interest rate on your private student loans. We’ll link it in the show notes. You can also negotiate all of your bills, phone, cable, utilities, rent, even interest again, on those loans. We have a script also linked in the show notes for you to learn how to do that. I have saved like $1,200 a year on things like my car insurance, just by calling and seeing if there’s any additional discounts they can offer me and making sure that I have the coverage I actually need.

Tori (21:54):

And again, you can be doing this anytime, but places might be more willing to adjust to keep you as a client during difficult times. We saw this with COVID, right? We’re still as of this recording on student loan deferment for federal loans. There’s more flexibility. Companies are more willing to be flexible, especially if you particularly ask them in your negotiation or in your call. It’s a rough time for me financially. What sort of resources can you offer me? The fourth thing, one of the most important, doing everything you can to diversify your income. What we saw with our last period of economic stability, which was like two years ago, and we’re still suffering from that, right, was layoffs and hours being cut and people being let go or furloughed.

Tori (22:45):

And if you are completely 100% reliant on one source of income, typically something like a nine to five job. And that nine to five job changes, you get let go, your hours get cut, something happens. You might be in a tight spot. So as much as you can right now think about diversifying how your income comes in. Do you not just have a nine to five job? Do you have something where you can make money doing five hours of work on the side?

Tori (23:13):

When I was a social media manager and my nine to five, I had Her First 100K. Her First 100K was my secondary source of income. And my third source of income was my stock market earnings. That might not be as applicable in a recession, right? But that it is a form of additional income. Your high yield savings account interest rate, that’s a form of additional income. Might not be a lot, but at least it’s something. Think about how you can be not just reliant on one source of income, but small ways that you can diversify that income so that if something does happen, you have a little more flexibility. It’ll cause you a little less stress.

Tori (23:51):

The fifth and the final thing, I need you to consume your news very carefully. I need you to think about when you are doom scrolling, when news is no longer helpful and instead anxiety inducing. This is important, both for financial news and for just the state of the world. I’m recording this coming off of the Supreme Court breach around Roe versus Wade. We also had a terrible racially charged shooting in Buffalo this past weekend where a white supremacist gunned down black folks in a grocery store. The news fucking sucks right now, guys, like it fucking sucks. And so when you consume your news, when you are a thoughtful consumer of what’s going on in the world, make sure you’re not only taking care of yourself, but consuming news just to get information.

Tori (24:40):

And if consuming the news is beyond that, if it’s causing you anxiety, if you are doom scrolling, if you’re no longer there just to get information, but you’re there because you can’t fucking stop looking, turn it off. You have my permission to turn it off. You don’t need my permission, but you have my permission to turn it off. It’s important to stay informed, but doom scrolling helps nobody. And like I said earlier, be really thoughtful about where you’re getting your information from, who is giving it to you. How are they trying to make you feel when they give you that information? I don’t want you driving up your own anxiety during a time of crisis. It’s only going to make things worse. During any time of financial hardship like I said before, it’s very stressful. It’s a really scary time.

Tori (25:23):

And your number one priority during those times is to put your own oxygen mask on, take care of yourself, do financial self care, do regular self care, find communities and people that you can talk to about what’s stressing you out, find communities and people you can talk to about what’s making you excited. Hopefully that’s Her First 100K. Hopefully you feel safe and excited to be in this community. So this is your beacon of light at the end of the tunnel. If things get a little gnarly out there, stay the course, be consistent. The stock market, the economy is a roller coaster. It’s sometimes very exciting to ride. Sometimes your stomach’s doing flip flops, but at the end of the day, it is a ride. It’s fucking Space Mountain baby.

Tori (26:12):

So I am here. I’m here to support you. This community is here for both guidance, education in a way that, of course doesn’t shame you. And in a way that gives you information you need without that anxiety, without that fear mongering, but is also a place you can turn to ask questions, to get some reassurance and to get some comfort that you’re not alone. I will end this episode by saying again, we don’t know when a recession’s coming. It might be this summer. It might not be. Anytime you can take of yourself financially, anytime you can use money as a tool to prep your life is a great time.

Tori (26:50):

So regardless of if economic turmoil is coming, it’s a great time to do some financial self care, to figure out where you’re at on the financial game plan and to continue engaging and learning more. We are so thankful you’re here. We are so thankful you listen and support Financial Feminist. As always, you can rate and review and subscribe. It’s one of the best ways to support the show. And if you’ve got a lot of information from this episode, and you’ve been talking with friends and family who are also concerned about a lot of these things, I would invite you to share the episode with them, have a conversation about it. Might be a really beautiful permission slip or an opening for you to maybe share some of your anxieties, to talk with other people in a way that’s constructive rather than anxiety inducing.

Tori (27:35):

And if you have more questions, comments, concerns about the stock market, about economic instability, any of that, you can leave us a voicemail as always. That’s linked in our show notes. And again, we’re excited. It is hashtag stock girl summer, baby. We are excited. We are building wealth. We are becoming rich bitches. So many of you are investing for the first time. You’re learning how to navigate the stock market. You’re learning how to be a smart investor. This is the time. If we are truly prepping for potential economic stability, now is the time to get educated. Now is the time to know what’s happening and to know how to navigate the system.

Tori (28:11):

So Treasury is available to you. We’ve linked it in the show notes. Also, just join us on Instagram or TikTok. We are going to be doing hashtag
stock girl summer content all fucking summer long. Let’s go. So can’t wait to see you back here. We’re doing more episodes about investing again. I can’t say hashtag stock girl summer enough. I’m going to tattoo it on my goddamn forehead. Thank you for being here. Thank you for being Financial Feminist. Happy hashtag stock girl summer. And I will talk to you soon.


Tori Dunlap

Tori Dunlap is an internationally-recognized money and career expert. After saving $100,000 at age 25, Tori quit her corporate job in marketing and founded Her First $100K to fight financial inequality by giving women actionable resources to better their money. She has helped over one million women negotiate salary, pay off debt, build savings, and invest.

Tori’s work has been featured on Good Morning America, the New York Times, BBC, TIME, PEOPLE, CNN, New York Magazine, Forbes, CNBC, BuzzFeed, and more.

With a dedicated following of almost 250,000 on Instagram and more than 1.6 million on TikTok —and multiple instances of her story going viral—Tori’s unique take on financial advice has made her the go-to voice for ambitious millennial women. CNBC called Tori “the voice of financial confidence for women.”

An honors graduate of the University of Portland, Tori currently lives in Seattle, where she enjoys eating fried chicken, going to barre classes, and attempting to naturally work John Mulaney bits into conversation.

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