Recession: The Big 'R' Word and You

The big 'R' word is in all the headlines these days, while economists and pundits disagree over whether we're already in a recession, on the brink, or able to avoid one. But a recession is not about words or opinions or statistics. It's about your life and your personal finances.

What's a Recession?

The technical definition of a recession is "two consecutive quarters of negative growth in the economy (GDP )." Of course, the official recession tabulators, the National Bureau of Economic Research, can never actually confirm that we're in a recession until those six months of economic pain are behind us. So don't worry about the labels. Instead, you should worry about how well prepared you are to survive an economic slowdown.

The recession we're now entering (yes, that's my opinion) will be unlike previous major slowdowns. You may not remember back to the early 1980s when interest rates soared to keep up with inflation . That was a more "traditional" recession, with tight money and high interest rates causing an economic slowdown that spread from housing to autos to steel. And then after a year or two, recovery started in most of the economy. Of course, some jobs in autos and steel were lost forever, but the economy rebounded in other areas. ...