The economy has been sending mixed messages in recent months. But those messages got decidedly worse this week, with rising inflation and a brutal jobs report. It’s making everyone a little jumpy.
Stock markets swing wildly on tariff headlines. The Federal Reserve, after months of cautious optimism, has downgraded its economic outlook for the remainder of the year. And while unemployment remains low on paper, the data underneath points to some warning signs for the labor market. Employers added just 73,000 jobs in July, with major downward revisions to the data for previous months, making for the worst three-month stretch since 2020.
Plus it’s getting harder — and taking longer — for workers to land a new job after losing one, while wage gains remain modestly slow, according to a recent economic analysis from U.S. Bank.
With so much uncertainty in the air, financial planners are urging Americans to shore up their finances now while their incomes and jobs are stable. Here are some expert tips to get started.
1. Build a bigger emergency fund
The traditional rule of thumb of setting aside three to six months of living expenses for a rainy day may not be enough anymore. Travis Veenhuis, a certified financial planner with SGH Wealth Management in Lathrup Village, Michigan, recommends clients have “six to 12 months worth of expenses saved up in a safe and liquid place.” That can be a high-yield savings account (HYSA) or a money market fund.
Mike Bisaro, president and CEO of Straightline Financial Planning in Troy, Michigan, agrees that prioritizing emergency funds is critical before attacking debt consolidation or reshuffling your stock portfolio.
“When people are perhaps a little more vulnerable — they’re working on contracts that perhaps might not be renewed or if they’re working for any employer that might be disproportionately affected by economic conditions — you want to ideally be more aggressive with the savings,” Bisaro said.
Where to keep it: Both experts recommend HYSAs, which currently earn around 4% annually. “Emergency funds should always be safe and easily accessible,” Bisaro explained, noting that even certificates of deposit, or CDs, might not be accessible enough during true emergencies.
Start small: Even if you have nothing saved, don’t let that paralyze you. “Even $5 a day can come out to over $1,000 a year in terms of additional savings,” Veenhuis noted. “Just starting is the most important thing.”
2. Tackle high-interest debt strategically
By the end of March, Americans amassed eye-watering levels of credit card debt to the tune of $1.18 trillion, with an overall household debt load of $18.2 trillion, according to quarterly data from the Federal Reserve Bank of New York.
With credit card interest rates exceeding 20%, debt reduction is crucial to weather financial storms. But the approach matters. Veenhuis, for instance, runs detailed analyses for his clients to determine which debts to prioritize but offers this rule of thumb: “Target your highest interest debt first. Paying off things like your credit cards with 20% interest is usually a good place to start.”
Bisaro favors a modified debt snowball approach, focusing on smaller balances first but with adjustments for certain situations. When you see progress after each account is paid off, it’ll motivate you to keep going.
Both experts agree that building your emergency savings fund first is key, even if it means prioritizing that over knocking out certain debt payments. However, while you do that, make sure to keep making the minimum payments across all your credit card and loan accounts to stay current.
“The creation of an emergency fund truly should be the first step to a debt consolidation or a debt payoff process,” Bisaro said. “When something unexpected happens, you don’t have to go right back onto a card or right back into debt to handle it.”
3. Don’t panic about your portfolio
Market volatility can trigger emotional decisions such as stock sell-offs or pulling back on investments that derail long-term savings goals. Both experts stress the importance of sticking to your investment strategy without being deterred by the headlines.
“If you had a plan in place already geared towards meeting your longer term financial goals, I would say that changing substantially your risk tolerance or selling off substantial amounts of stock in those moments is a huge mistake,” Veenhuis said.
He pointed out that the average stock market return for the U.S. two years following a recession’s start is “actually a positive 8.8%.”
Meanwhile, Bisaro emphasized understanding your risk tolerance. “You have to understand what that long term strategy is that fits you best […], and resist the temptation to radically alter it based on things that may be out there.”
4. Focus on what you can control: budgeting and spending
With the cost of everyday essentials rising, both financial planners said that cutting discretionary spending back is necessary. However, that involves letting go of stuff nobody wants to give up.
“You can’t stop eating, you can’t stop going to the doctor,” Bisaro said, adding that making temporary spending cuts can give you much-needed breathing room in your monthly budget.
Veenhuis suggested looking at auto expenses and travel as potential areas to cut back. The goal: live within your means and “adopt a lifestyle that really aligns with your income,” he said. If you make those sacrifices and end up losing your income, “you weren’t overspending in the first place,” he added.
5. Diversify your income
Even if you have a stable job, that can change in an instant if the economy goes into recession and companies have to make cuts. That’s why having multiple income streams can help bolster your financial position so you’re not scrambling if you lose your day job, Veenhuis said.
Consider picking up a side hustle — freelance photography, consulting or writing, for instance — that aligns with your personal interests and can earn you extra money. You can put that additional income towards shoring up savings or paying down debt.
Beyond side hustles, make moves to prepare yourself for future career pivots — whether that’s changing jobs to increase your income or bouncing back after a layoff.
Veenhuis recommends keeping your resume updated and polished, upskilling by investing in certifications and even using AI tools to find relevant certifications or training in your career field.
6. Avoid trying to time the housing market
For renters who are considering a leap into homeownership, it’s tempting to try and time the market. But any housing analyst will tell you waiting for mortgage rates to magically fall or a recession-driven drop in home prices is an exercise in futility.
According to Freddie Mac data, mortgage rates have stayed stubbornly north of 6.5% so far in 2025 and are projected to stay there despite initial projections that they’d end the year below 6%. And while data shows that national home-price appreciation has slowed, many areas of the country still grapple with too few homes available at affordable prices, further straining buyer demand.
“Not only is it extraordinarily unlikely, you don’t want the economic conditions that would be required for that to happen,” Bisaro said about waiting for significant home-price drops.
Many homeowners with low pandemic-era mortgage rates find themselves stuck in place. Even if they want to downsize or move up, the math of trading their current rate for today’s higher borrowing costs and steeper home prices simply doesn’t pencil out in their favor. That’s led to supply constraints that are unlikely to resolve through an economic downturn.
7. Stay calm
The biggest mistake both experts see? Fear-based decisions — especially with investments or debt consolidation.
“Making informed decisions is the most important piece,” Veenhuis said. “If you’re selling off at a low point, you’re going to be missing out on the pending recovery thereafter.”
Bisaro noted that much of his role as a financial planner involves “calming people down and explaining how history has worked in these situations.”
In other words, if you’re worried about your financial situation, it’s always best to approach things with a level head versus being swept up by emotion.
Next steps
Preparing for economic uncertainty isn’t about predicting the future; no one has a crystal ball. However, it’s about building financial resilience so the shockwaves of a job loss or a recession don’t put you in a precarious position.
“A lot of that work is done early in terms of preparing yourself for a moment like that,” Veenhuis said. “Take adequate steps in the meantime to build up those healthy emergency savings funds, pay off that high interest debt, keep up to date with your resume, add new certifications. All of those factors combined are going to get you through the bumpy road ahead.”
The most important takeaway of all? Don’t let uncertainty paralyze you. Start where you are, with what you have, and build from there.
Not sure what to tackle first and want extra guidance? Bisaro recommends finding a financial planner who works as a fiduciary to serve your best interests.
“A good adviser is a teacher, so don’t discount your gut feelings and the feelings that that person conveys to you, because those things matter,” Bisaro said. “If they don’t take the time to answer your questions correctly and fully in a way that you understand, it’s not a good foundation for the relationship.”