Talks about a recession are looming over us and although we can’t be sure of what’s to come, we must be aware of the risks of a recession and how we can prepare for one to the best of our ability. But what is a recession exactly? In simple terms, it’s when the economy declines for a while. During this period, trade and industrial activity are reduced. Recessions are super difficult for people’s everyday lives. Typically, jobs are lost, unemployment rises, prices get higher and shortages are bound to happen.

But how can you prepare for something that comes with so many uncertainties?

• Get that emergency fund in place: This is the time to build and grow that emergency fund. If you lose your job during a recession, you will spend some time finding a new job. During that time, you may find yourself without a job for some time or taking another job that might come with a pay cut or reduced hours. Your emergency fund is more important than ever to help you during this time.

• Your budget is important: Creating a budget will help you figure out how much you absolutely have to spend every month and how much you can eliminate spending and save instead. This will also come in handy in case you lose your job. It’s important to have a definite list of your expenses.

• Pay your debt: If you can afford to pay down debts, this is the time to do so. The last thing you want is to have additional payments during a time when you’re not making as much money, or when the price of everything else is increasing and your wage is staying the same. Increase your monthly payments if you’ve got debts and try to pay down as much as you can.

• Consider a side hustle: Can you do anything during your off time that will help you make more money? If so, don’t waste any more time and go for it. If you have something in mind that needs some training, do that training and begin the work. There’s no better time than now.

• Keep investing: If you can afford to, keep investing. This is a good time to focus on growing your wealth and preparing for a rainy day. We have lots of great Halal options at Manzil.

And most importantly, keep your faith strong. Your faith will be tested all the time and financial instability is a time that surely tests us all. Thank Allah for the blessings He has given you and do what is in your power to better your situation.