Recession Proofing Your Finances w/ Meghan Rabuse

the worst are our words out there? One of the worst. I can't can't think early, so I can't Yeah, I can't think of another yeah. But you will leave this episode feeling much more confident, much more educated, much more in control of your finances. Our guest Megan does an amazing job of breaking down this concept of what's been going on really since January two, what you've already been living in, and what is to come. So this is a very important episode for everyone, no matter where you

are in your financial journey. I left that I personally, Jen and I we chatted about this right after recording later that night, how pivotal this conversation felt for me. So I walked away feeling hopeful and encouraged, and I hope that that's the same for you all as well. She's a phenomenal speaker and just really relatable and helps to break down this topic in some ways that I think will be helpful. So so glad you're here. But first,

our spawn answers recommendations. This episode is brought to us by recommendations, and they want us to know that they are only as good as the person making the recommendation. They're really at the whim. Can't stand hardcore music, but taking a recommendation on a new band from a hardcore hardcore fan not a good idea. Loves taking seafood recommendations from local fisherman, that's a great idea. Recommendations sometimes they're good,

sometimes they're bad. But right now, some personal finance experts are about to give you a recommendation on a new high yield savings accounts, so you decide rates on high yield savings accounts are rising, and that means we have a new recommendation for savings accounts. Right now. C I T Bank is offering one point three five a p y on its Savings Connect account with no monthly fees

and only one hundred dollar minimum to open. If you need a new savings account, head to Frugal Friends podcast dot com slash c I T to check it out. M M. I love those recommendations. I love them. So after you listen to this one, if you want to, I think you're gonna want to go, Uh, listen to episode one Understanding the stock Market and Investing with our guest Bolasa Kumbi. Uh. It might help clear up of a few things about the stock market. We don't get

heavy into that today. And then another one you might be interested in queuing up is episode one oh two Financial Tips when money is tight. This one we recorded in March of where we didn't realize what was going to happen. You know, hindsight is for lack of a better word, um, So, while I regret that we aired it, then, I think it might be it good now because we are already very far into what you're you know, what

you think of as a recession. So they these might have and they obviously they're not if you're living on the border of the poverty line, these are not the tips. That's not what this episode is kind of for. It's kind of if you've typically had enough money to cover your bills and then some. Um, but you're feeling a pinch because of the change and inflation and stuff like that.

That's kind of what these are for. Um And so later on we might do more episodes focusing on more lower income scenarios, but not all of our episodes are for everyone, and that's okay. Uh So, yeah, I am super excited to share this one because I think this

one is for everyone. Everyone should understand this. Uh So, after working in corporate finance uh for over ten years, Megan reviews of Family Finance Mom, she decided that her and her husband working sixty hours a week each and a nanny raising their growing family was not how they wanted their journey to look. So now she uses all that corporate finance expertise to run Family Finance Mom and

host the Finance Explained podcasts. Both aim to help women build their financial literacy so they can make better decisions for themselves, their families, and their futures. And Megan is definitely one of those top ten people that I follow on Instagram because they actually teach me something new every time they post, and so I honestly do learn new things from Megan every time I hear from her, and so we're very excited to share her with you. And we think that you're going to get as much out

of this, if not more than we did. So excited, let's do it. Megan, thank you so much for coming on the Frugal Friends podcast. We're very excited to have you because I think we're going to learn a lot from this episode, along with all of our listeners. In you so much for having me and excited to be here. I have so much to learn in in so many areas, and this is definitely one of them. So Jen and

I joke often that we do I will. I joke with her that I do this podcast quite selfishly just so I can stay motivated and accountable and learn more. And it has done its job. I've learned so much, done so many things I wouldn't have done without this, so and interviews are my favorite. So thank you. Thank you for coming and teaching us and sharing your wisdom with us. Absolutely, So let's let's dive into talking about this really light fun subjects that we have planned today.

Recession proofing your finances, So tell us, like, let's let's get into this recession buzzword, like what typically happens in a recession? And how do we know we're heading for one? In Layman's terms? Sure, So, you know, I think people often use the word recession and it's like this big, scary, intimidating thing. People get really nervous. But it's actually an

official economic term with a very specific definition. Officially in the United States, the National Bureau of Economic Research, and you can check out their website at nb ER dot org. They are the official organization in the United States that declares both the start and the end of a recession. Now, unofficially, a recession is simply a slowdown and overall economic activity.

And in the US, we define economic activity as gross domestic product or GDP is what you might hear kind of commonly mentioned, and it's basically measuring the value of all the goods and services produced in the United States over a specific period of time. And so the unofficial definition of a recession is two consecutive quarters of negative real GDP growth. So let me break those terms down

kind of even further. So negative means instead of increasing quarter over quarter, it's declining, and real GDP means growth absent the benefit of inflation. So if you think about what's been going on in the current economy over the last year or so, inflation has been really high, much higher than normal, And so in order for real GDP to increase, it means that if you strip out all the benefit of price increases, is the economy still growing? And what we had happened in the first quarter was

it didn't. There was actually a decline in GDP in Q one, which ended back in March. Q two officially ends this week UM actually today as we're recording this UM and then usually there's about a one month lag before the data on GDP gets released, so sometime around the end of July that Q two number will come out.

My inclination, given kind of everything I've seen coming out of like things like corporate earnings reports, monthly reports on consumer retail sales and things like that, my inclination is

that we're already in a recession. The data just hasn't come out yet for it to be officially announced, and that is that's very common, like it typically is going to get announced on a lag because of the way the data comes out, and likely my guests and this is just my educated guess it's not been officially announced yet, is that Come the end of July, when the data comes out, the National Bureau of Economic Research will say, hey, peak GDP was December of twenty twenty what you and

that we've already been in a recession most likely since probably January or February of this year. Wow, that's very helpful because while we talk a lot about personal finance, and we talk a lot about ourselves slowing down our consumption in the market, we we don't correlate that with um, the overall economy. Uh So it makes it that definition kind of makes it a little less scary, and and to kind of tie it into that when you look at GDP and the makeup of US GDP, we are

a very consumer driven economy. So GDP is something like two thirds or almost GDP is consumer spending, which is literally like you and me going to the grocery store, you and me going to target people buying furniture, buying cars, all of that economic consumer activity. So and take a look around at what you know you and your friends are doing. Are you buying less than you were buying a year ago? Are you eating out less than you

were doing a year ago. Um. You know, over the pandemic, a lot of people invested in their homes and making their homes more comfortable environments, Like people are doing that less with the benefit of the stimulus checks that a lot of people received. Last year, people bought things like new cars. You're not going to do that every single year.

And so there is some you know, some of that stimulus money pulled demand forward into last year, and now we have those difficult year over year comparisons, as well as the fact that just people aren't going to spend money on especially those big ticket items that people were likely buying last year. You're not going to do that every single year. Um. And so this is kind of the um if you think of the economy a little bit like a cycle, because economic cycles are kind of

the natural progression in the economy. Recessions are not unexpected. They happen. It's sort of a natural part of the economic cycle. The economy goes through phases of expansion, contraction, and recovery, and so the recession is just the contraction piece of it, and it's coming from people like you know, the three of us pulling back on our spending. There's something so cathartic and almost hopeful about just hearing the

matter of facts of what a recession is. And I think that's the case with so many things we kind of something can become so scary, particularly when it's unknown, and when we name it, when we identify it, when we put words to it, it makes it okay. I can I can understand what that is, and I can respond to it rather than just the scary monster behind the door that I don't want to open the door, don't look at it because I don't totally understand it. But then once we do see it, it's like, oh,

that's not that's scary anymore. I can respond. And it's also quite interesting to just know the definition of a recession. I don't know that I had put much thought to it other than yeah, a lot of times people just struggle more. And yes, it's related to the on to me,

but I don't totally know why it happens. I just need to know I might want to buckle down a little bit more on my spending, but to realize it has to do with what has already come before that once we get to the word recession, we've already been living in it for half a year, and so even recognizing that that it's not what's to come, it's what you've already been living in. And if you've been okay,

at least surviving, then there's hope in that. Not to say that it it hits people in various ways, so I'm not taking away from suffering in that, but there is something that strikes me as a little hopeful the resilience piece there. Yeah, I had one question that I thought of while you were talking, Megan, and do you think that, um, some of the the GDP growth from last year was maybe a little artificially inflated or or faster than it would have been. I mean absolutely, and

you saw it. Um. So we can break GDP or gross domestic product down into various pieces. Um. And historically, you know, like I said, the US is a very consumer driven economy. Over the last call it seventy years, that consumer spending has shifted away from goods so physical objects, and much more towards services. And so what happened kind of if we think about what went on over the last two years, the services side of the equation, which today makes up the bulk of consumer spending in the US.

In many ways got shut down, right, and so people, you know, whether it was during COVID lockdowns, people weren't traveling as much, we weren't eating out as much, some restaurants closed entirely. And what happened was is those first round of stimulus checks were coming out, and the businesses that they should have helped the most were kind of all those service businesses that we couldn't go spend that right, or we weren't comfortable going out and spending are we

weren't comfortable going out and traveling. So instead you had this big boon in spending on goods, and in particular durable goods. And that's where we saw a lot of some of the inflationary impact because if you think about the way our economy functions, the US economy is very stable. Typically, it's very predictable. Companies and businesses plan for things like inventory and production based on that predictability and consistency, and the pandemic kind of threw a wrench into all of that.

That's some of why you're seeing inflation. It also is some of what you know, when people got those stimulus checks, they spend a lot of money on goods that they wouldn't normally spend. And so to your point, back some of that shift in the pulling forward of consumers spending, and we're cycling against that, and especially on the durable good side of the equation. So you'll hear the goods

piece of GDP broken into durable and non durable. Think of durable as anything that lasts more than like one to three years. So things like furniture, things like cars, things like um, major appliances, those are durable goods. And that's where you saw a lot of like supply chain impact, where you saw a lot of inflation initially, and where you saw kind of a spike in demand. That's not gonna like repeat itself again for a while. So to your point, yes, I do think that that pulled some

of it forward. And so instead of having kind of the smooth, consistent, predictable economy that we're used to, you know, the government, in order to help people may have overdone it a little bit um and now we're suffering the repercussions of that. To bring what you're describing to a little bit more of the micro level for individuals, for households, what do these terms mean for a typical household recession inflation, what do you see? What does that mean for peach? Sure?

So I think it's important to remember that every household is a part of the economy. The economy is really just the impact of all of our economic behavior at a household level, put together and combined. And so I like to kind of think of ourselves all as like little cogs or gears in the economy overall. And so you all need to be turning together in order for the economy to be functioning well. Your spending is somebody else's income and vice versa, depending you know, depending on

your job and what you're doing. So at the micro level, what does the recession mean, Well, it can mean It can start as like a lapse of confidence, right, So if everybody is worried that a recession is coming, and so you start to buckle down, maybe you start to like bulk up your emergency fund, so you're increasing your savings and decreasing your spending. It kind of becomes a

little bit of a self fulfilling prophecy. So if everybody starts doing that, you have a collective reduction and consumer spending, which decreases demand at the business level. And so then the next thing that happens is businesses don't see people spending as much. Their revenue is coming down. In order to preserve their profit, they need to cut expenses. And the easiest way for them to cut expenses is by starting to reduce jobs now and the and so that's

why oftentimes you see increase and unemployment associated with a recession. Again, the unemployment piece of it tends to come at a little bit of a lag. I'll come back to that in a second, kind of the leading and lagging indicators of a recession. But that's where at the micro level people that's why people start to get concerned. They start to worry like, if things slow down, is my job at risk? And so in order to prepare for that,

they may want to bulk up their emergency fund. They may want to streamline their budget to like the bare bones level, so that they have money set aside in the event that they might lose their job, um in the event that it might take them a while to find another job. Now, one thing that is a little bit unique in the current environment is the labor market

is extremely tight. What do I mean by that? The unemployment level is near record low levels, kind of back to where we were pre pandemic, where we were seeing fifty year unemployment rate lows. And at the same time, we've seen record high numbers of job openings, so employers have been trying to hire and you know, if you go out and talk to a lot of small businesses, like as an example, my daughter had an eye doctor appointment this week. First of all, it took me seven

months to get her an eye doctor appointment. Um, that's how backed up they are. And second of all, he's been trying to hire someone who fits the glasses so then he can see more patients because he's not doing both. And he hasn't been able to hire someone for over a year that he's been looking. And so you know, that's one small business, but you hear that story or something like it over and over again. So what is likely to happen kind of on the employment side right

now is I think we'll see those job openings reduce. Um. Right now, they've been at the kind of ten million, eleven million number every month. That's job openings nationwide across all employers. My expectation is will start to see that fall, and we have a little bit already you've already heard kind of big tech companies talking about either layoffs or

hiring freezes. That's kind of the first step. And because there's such a tight un employment market, I think we're likely to see those job opening numbers fall before we see kind of a big rise in unemployment overall. So that is something I think you can take some comfort in. But just to kind of describe what happens and why people at the micro level react the way they do, it's because of the fear or concerned that you know, their job could be at risk. That's so good to know.

It is always a concern when we talk about increasing income. You have to do it at different Your strategy has to be different in different seasons, and so in a recession, it's definitely you know, while you still have a job, like a saving, saving, saving type of thing, because you may not get the bonuses you thought you like that you got last year, and you may not be able to get the promotion um or job hop to a

higher paying job like those opportunities slowed down well. And the other the other piece of that is one of the things that we've seen. There's a monthly report that comes out called the JOLTS report comes out from the Bureau of Labor Statistics and it stands for job opening,

labor turnover and separations. And one of the things that we've seen is that there's a huge number of job openings, like record breaking level, but also the quit rate where the people voluntarily leaving their job, has also been at an extremely high level, and that's really what's driving the

bulk of separations every month. Now. In a booming economy where there's a huge number of job openings, it is and in an inflationary environment, it is enticing to jump and switch jobs in order to get a bigger paycheck or for greater opportunity, or for better benefits, or whatever the case may be. But something that may give people more pause if we're worried that the world or the economy is going to slow down is oftentimes tenure matters

in a downturn. So if you are the low man on the totem pole, if you have not if you know, if you've been somewhere for not very long and there are layoffs, oftentimes you're the first to be cut. So sometimes you know, you may think twice about making that jump for a higher paycheck because if things take a turn for the worst. And I think this is especially true if you work in more cyclical industries UM that are more impacted in economic downturn So things like leisure

in hospitality UM. Oftentimes real estate and construction tends to be more cyclical and more impacted in economic downturns. UM. Sometimes energy can be more impacted in economic downturns. Retail is another area those sectors. You know you might kind of give it a second thought as to whether this is the right time to make a move. That's such

a good point your own seniority. And that's not to say I think still in the long run it is good to look for more opportunity to build your skill set, but particularly right now, that's a fantastic thing to consider when thinking about job hopping and what type of industry or environment you're working in. It's one of the things we talk about related to knowing how much of an emergence see fund you need. It depends on exactly volatile

the field that you're working in. Is you want to have a bigger emergency fund if your field might be a little bit more volatile, or you're working for a startup or you've maybe not been in the company or organization for as long, but considering also where are we economically and what might happen, and it might be worth our while for some of us to stay where we're at and waited out the wait, the wait and see. Yeah, just wait and see kind of what happens over the

next six to twelve months. Yeah, because that is advice we give, we have given all the time, is to get a new job, to get a higher pay increase. But different times in the economy call for different strategies. So this is yeah, this is great news to check in with your strategy. And I think industry matters too. Yeah, absolutely, yes. Uh so, I feel like there's going to be like two two types of listeners and nobody can know who

they are yet. Um, but there's gonna be like the one who really is in survival mode during the recession, and then there's the one is really optimizing and like

can put steps forward to thrive? Can you talk about like how the person who feels like they're just surviving maybe has lost their or will lose their job, has lost you know, thinking about in the future maybe six months, the person who's kind of on the edge and trying to survive, Like, what, how do you suggest they kind of like prepare for the recession and kind of survived

through it. So one of the things that I always tell my listeners is everybody, no matter your situation and no matter kind of the time of the economic cycle. You may have your monthly budget that you live and breathe every month, but everyone in their back pocket should have what I call a bare bones budget that if tomorrow you got called in and laid off from your job, that you could have a list, a hit list of

the things that you would eliminate immediately. And maybe if this is a bigger concern from you and it's something you're really worried about, maybe you implement some of those sooner rather than later so you can bulk up your emergency fund. So what are some things that might be on that hitlist? Make a list of all your subscriptions, like are you using them? You know, everything from Netflix to Spotify to you know, how many different streaming services

do you really need? How many different music services do you really need? Um? Are there services that you use on a monthly basis that you might not need to pay for and you could bring in house. The other area that I think most families tend to have kind of access is in food spending. Can you eat more at home? Can you pack your lunch every day? Can you spend less eating out? Can you make your coffee?

You know, people get a lot of flat for saying this, but like I'm a firm believer that, like, you know, making my coffee at home every day ast me less than a dollar cup versus if I go to Starbucks, it's like five fifty for you know, that adds up every single day, and it has a huge makes a huge difference, especially if you're you know, you have two people in your home and you're both doing that. It's

not nothing. Uh And so you know, and the same is true with like eating lunch out or eating dinner out, or ordering takeout or getting Uber eats or all those things. So you know, if you haven't, and I think one of the things that's hard right now is that a lot of families, because of inflation, have already been doing

a lot of this buckling down. But if you haven't, and you're one of those people who is in a cyclical industry, is worried that their job could be at risk, like now is the time to do it if you haven't already. Um, but those are the types of things kind of like I put on my hip list that I know that if I needed to, I could eliminate tomorrow. So that's kind of that's what I would encourage people to do. And then the other thing is that if you implement it now, then you can start to bulk

up your emergency fund. And it sounds like you guys have talked about this with listeners already, but you know, if you're someone that is in one of those more cyclical industries, if you're someone who has changed jobs in the last six to twelve months and are lower in seniority, you know, maybe your goal is to strive for like a six month emergency fund instead of a three month emergency fund. And the other thing is like, don't ever be ashamed afraid to pursue whatever benefits you are entitled

to in the event that your job is eliminated. Um, that is what those benefits are for. And oh, by the way, when you're working, you're paying into those in order to support you and other members of your community in the event that these things happen. And the thing is, is is there often can be a lag or time in order to like get that all in place. So the sooner you take action to make that happen, the sooner you will start to receive those benefits. And there's

no shame in that at all. I think some times, you know, people put a stigma on things like that, and you know that's what they're there for. They're there to support you when you need them, and so don't be afraid to you know, pursue those benefits either. Thank

you for saying that, Megan. That's super super important reminder because sometimes despite all of our efforts, we can find ourselves in some really difficult spots and there is no shame in reaching out for the help that you need from a variety of sources, community and within the government. Like you said, that's that's why they're there and we pay into it, So take advantage definitely. And I just

one more um like follow up to that. So in six months, say somebody still has their job, they're not in one of these cyclical industries, and they feel like, okay, I feel like a little bit more confident. What can they do? Because like there's a saying like millionaires are made in recessions, Like, what is one thing people can do to take it manage of the recession for greater wealth building in the future, Invest aggressively. Um, the market is on sale. I mentioned earlier kind of talking about

leading versus lagging indicators. The stock market is typically a leading indicator of a recession. So what we've seen happen basically like this is the worst first half year of a market performance in like over fifty years. If you look at really successful, long term successful investors like Warren Buffett, look at the amount of money that they are putting to work right now, this is the time when those

people make those huge um long run outsized returns. It's because he sat on cash through the last excuse me, the last couple of years, and now he's putting all that cash to work. Because he's lived through cycles. He knows how this plays out. So I kind of call it like the Buffet indicator, like watches like why atch his like quarterly statements and reports like when he's putting money to work. If you have access cash, that's the time to put money to work. Um. And what do

I mean by putting money to work? I mean I think everybody who can afford to should invest consistently on a monthly basis, you know, you should contribute to your four O one K. But in a period like this when the market is on sale, you know, I think sometimes people are like, oh my god, we're in a bear market. The markets down. Well, that means it's less now than it was in December when everybody was like all gung ho about investing in it. So why are

you still not all gung ho? Um? If any, it's sort of like if you're eyeballing a pair of shoes, you know, and you really wanted the pair of shoes and you didn't buy them, but now today they're twenty five percent off, like you're like score, But nobody thinks

about the market that way, and you should. And so if you're one of those people who your job is secure, you bulked up your emergency fund, you've written out the recession, like you know, now is the time to put that money in the market, and because of inflation to you're going to offset that because you know, having it in a savings account is not going to generate enough interest to offset where inflation is right now. You really need to be investing in order to do that. What were

some of the lagging indicators? And you talked about leading and lagging, what were those? So one of the lagging indicators is unemployment. So like if you look at sort of what happens leading up to it, things like the stock market selling off, things like retail sales slowing down, those are all leading indicators. Lagging indicators tend to be things more like housing starts, things around construction, things around like durable good sales um and then unemployment is really

the big lagging indicator. It's amazing. I think many of us elder millennials and beyond have really navigating This would be for for many the third, if not more recessions that we've been through. So, oh my gosh, yeah, I totally forgot about the tech one. Oh my god, we've

we've been here before. But yet, as you mentioned, technically, this would be four because so two thousand was the dot com bubble, two thousand eight was the Great Recession, which was kind of housing related, was the pandemic, which officially was like two months, but it was a massive kind of boomerang um, and so this would potentially be four. I don't know if you count two thousand as an Elder Millan. Oh, yeah, recession. Yeah, it's a bonus. So

we've been here before. And yet, as you said when we first got on this podcast, it can create anxiety and fear in people despite a knowledge of it and having been been there, done that. Do you have any thoughts, especially paired with your factual knowledge, on what people can do just to help themselves mentally, how to maintain hope, Uh, stay afloat within the midst of some of that anxiety.

What where are you recommending? So I'm a big believer, and I think you guys are too, Like I believe knowledge is power, and I think sometimes a lot of times anxiety comes from fear of the unknown or lack of understanding. I also think there's a tendency, maybe not from millennials, but maybe like the generation below us to be like, oh, we have this so hard, my so

on Family Finance Mom. I run a quarterly book club, and the book club for the most recent quarter was actually The Four Wins by Kristin Hannah, which is a very detailed depiction of like what the Great Depression was actually like that a book, and I think it's important perspective. I think it's important to be a student of history

kind of no matter like what industry here. And I think it's important to be a student of history, to under and to learn from it so that we don't repeat the mistakes of the past and that we learned from them. You know, people, I think, oh my god, we've been through a pandemic. We've been through a recession, Like do you have any idea what it was like for like our grandparents and great grandparents who lived through

two World wars. Oh, by the way, a massive pandemic that killed like I don't remember the order of magnitude greater than it was from COVID nineteen, but the nineteen or nineteen eighteen flew was massive um which, by the way,

also triggered a recession. And then like not even ten years later, you had the Great Depression that lasted an entire decade, like an entire decade of plus unemployment, where there were people literally in America starving to death because on top of kind of a stock market crash, you had massive droughts that lasted for years, like people lost

their farms, their entire livelihoods, their homes. Um. And I'm not saying that that doesn't happen to some people in economic down terms, but it was far wider spread, far

longer lasting, and far wider reaching. And so that isn't to minimize kind of the hardship that anybody may have experienced over the last call it, twenty years, but I think that perspective is helpful to know that, you know, economic recessions happen, but every economic recession we've ever had, we've recovered from and gone on to grow and you know, improve, and you know, long term, the economy, the stock market, everything moves up into the right over the long term,

so that what's important is to set yourself up so that you're not living at the very edge of your means such that when there are these temporary contractions that you can't survive them financially. I appreciate so much of what you're saying, the knowledge, the naming it, the dispelling fear and anxiety by facing it and and educating on history.

I think this reframe that you're providing for us. I know, even in the clinical world, I hear a lot of people say, oh, but other people have it worse, other people have it worse, and as if to minimize their own circumstances and maybe not look at the pain that their current circumstances are are providing. And it's not always helpful to just focus on well, yes, this and this happened to me, but so and so over here in this country. Okay, there's always someone who has it worse.

But I do appreciate the reframe to say, but perspective, because wherever we can get perspective is what's going to be beneficial for us. As you said, not to negate someone's suffering or difficulty, but to allow it to help us to understand that there is post traumatic growth, there is resilience, there is hope, there is holding the tension of the really amazing, beautiful, flourishing times and the kind

of awful times, non beneficial time. And I think one of the things that I think people tend to lose sight of is that, you know, things like bankruptcy laws, for example, are designed to give businesses, individuals kind of a clean slate to then recover, and so I kind

of think of recessions in a similar capacity. It kind of from a business perspective, it weaves out the you know, businesses that maybe weren't intended to survive which frees up those resources to go work somewhere that is thriving and growing. And if you look kind of over history, on a like corporate history, some of the most successful business in the world have come out of periods of economic downturns. And it's because you free up talent, you free up capital, resources,

you free up you know, ideas. You know, people who may have been locked into some corporate job that they hated, they get laid off and there they have nothing to lose at that point, and so they pursue the idea that they've had on the back burner forever um. And so I kind of like to think of recessions as that clean slate period for those who maybe and when times are good, they don't have I don't know what the right word is, the guts or the the is it hutzpah? Is there go to kind of like take

that leap. But when you know, maybe you lose your job, maybe you get a good severance package, whatever the case, maybe you now have the opportunity to pursue something like that and maybe that's the next best thing or the next great thing. Well, necessity is the mother of intent invention, and I think just anecdotally. I see this in my grandmother and people of her generation. She lived through the Great Depression and she's one of the most resourceful people

I have ever met. And some of the things that came out of that time we continue to benefit from in many ways apart from a recession. I think we're trying to get back to man, how did we get to all these throwaway convenience products. So it's not good

for our environment, it's not good for us. So there's there's so much too that can happen even in the midst of not apart from so even as we walk through this time that might feel tight or pressing, there can be even good, joyous, creative things that happen now. So holding the hope even through it, not just hanging on gripping until it's all over, but also keeping our eyes open to the beautiful that might be right in

front of us. Yeah, you know what else is beautiful that's always right in front of us every single week and provides that joy in the midst. Yes, the bill of the week, that's right, it's time for the best minute of yours are a week. Maybe a baby was born and his name is William maybe you paid off your mortgage, maybe your car died, and you're happy to not have to pay that bill anymore. That's bill Buffalo Bills, Bill Clinton. This is the bill of the week, Megan.

Every week we invite our listeners and our guests to share with us their favorite bill for the week, and we would love to hear yours. Sure. So I used to mercilessly make fun of my husband for this bill, but we are the one of those people that have a monthly car wash membership. And to your point about, you know, making things last, I personally drive a fifteen year old Tahoe with like a hundred and forty thousand miles on it, and nobody can ever believe that that's

how old it is. And it's because I drive it through the car wash like twice a week because I get unlimited car washes, because we pay the thirty five

bucks to have unlimited car washes. And I think that it's a good indicator kind of of like some people might not see that as fiscally responsible, but the reality is is that after your home, your car is oftentimes the most expensive asset that people own, and putting money towards maintaining it and keeping it in good condition, which if up here in the Northeast, like we live close to the shoreline. Um in the winter they put salt

on the roads. Like by going through the car wash every week, we don't get rushed on the undercarriage or on the body. And so I can drive a fifteen year old car that still looks like no, you know, people think it's new, and so that it's worth it to us because it's yes music to mostly my husband's ears right now. But we have a car wash close to us. We didn't do the monthly membership, but I will say we probably do go at least once a month.

And it's actually a really fun experience. It's one of those where you go through the car wash and then they could give you the vacuums and the rags and the cleaning products and they're bumping music. It's it's a whole experience. It's a day. The lights in there, like they put like the like club lights inside the car wash, so it feels like you're in the club. So ours

has like these creepy like plastic mold. It looks like something out of like um, it's a small world like the Disney right, like the molded faces and Halloween they put costumes on them and my kids screech, that is so funny. Car wash. Yeah, but we I think we have a similar mentality of taking care of our things, even if we get it inexpensively. Do you know, I don't want to have a museum home, But it doesn't matter the fact that I got my couch used. It's a nice couch and if I keep it nice, it's

going to last me a long time. And my husband says that all the time about the car. You know, if we keep this nice, this could last us a really long time. And so vacuuming it out regularly and not allowing the scratches to happen, and patching up the paint so that it doesn't it's not more prone to russ like, those are the things that are really going to keep it in good shape and hold some level

of value. So I appreciate this. Yeah, And having a paid off car and paying thirty five bucks a month to run it through the car wash so that I don't have to buy an suv. It seems like a pretty good train off. I'd love that trade off. If any of you all listening in also go to an amazing car wash that you want to talk about. Or you know you've got like an uncle named Bill or a cousin named Bill, or you you interacted with the

bill of a Bill duck. Whatever you got for us, visit Frugal Friends podcast dot com slash Bill, leave us your bill, and now it's time for broad winding round. So today, oh, this is the least scary part. You go to a car wash that dresses up for Halloween. You can be all right for the lightning room. You yeah, you're gonna be fine here. So today we're going to talk about what we personally are doing to protect our

family from the possible recession. And uh yeah, just like one thing, Megan, you can go first as our guest. All right, Well, we have been doing a lot more food prepping. Um so in the summer especially, you can you know, I feel like the school year keeps families on routine a little bit better, and so in the summer often you can kind of have less routine. It can lead you to like not think about these things.

But what we've tended to do is kind of food prep more so, I packed our lunch when we go to the pool instead of eating at the snack check every single day or ordering Uber eats every single day. Um. And then also when we come home there's food that's easy to prepare because really, like the last I feel like the last few times we've gone out as a family, like what used to cost us, like call it forty

or fifty bucks for a family. If I've eat out, it's not like a hundred dollars And it's not even it's not even anything fancy, right, Like I used to expect if I went out and spent a hundred bucks on at dinner, that that was like high end. No, now that's like you know, sandwiches and fries at like a quick casual restaurant. And so it just become something that isn't worth it to us anymore unless it's like

truly a special occasion. And so that is one thing that we definitely have been paying more attention to and doing a lot more of. Well done food can be the biggest bearer. And like you said, when routine is knocked off course, that can be when we have the hardest time with some of our well intentioned plans. Yes, um, so for us it's not me in particular, but one of the places where we saw our cost rising pretty

rapidly was gas, especially for my husband's truck. Um. And he has a motorcycle, so he has switched to driving his motorcycle to work instead of his truck, and he has been able to cut down drastically on the amount of times he's getting gas. And I work from home, um, so we've really cut that part of our budget really really well. So that's smart. We were session proofed ourselves like two years ago by all the things that living

tiny helped us with. But yeah, we're a one car family, and really the pandemic has helped to train me to eat at home and cook at home, and working from home does help with that. I would say, in particular for us, what I am becoming more focused on is beefing up our emergency fund. It is still not fully funded for me. For we funded will be six months worth of living expenses, and I'm not there yet, but I think a little bit more of a focus on that than beefing up some of the sinking funds that

I was previously focused on. The one nice thing there too is um, I don't know about you guys, but I finally am getting emails from my high yield savings accounts saying they're actually increasing the interest rate, so it's still not enough to come anywhere close to offsetting inflation. But earning one point six percent feels a lot better than earning the point four and point five percent that

we have been seeing. So yeah, absolutely that feels good. So, Megan, you are you are a not just a wealth of knowledge, but you are a wealth of unique knowledge in the sea of personal finance creators. I feel like you offer such unique expert advice, So, like, where can people get more from you if they want to keep learning about this stuff. So the place where you can find me kind of most often on a daily basis is on Instagram at family finance Mom. You can also find my

blog family finance mom dot com. Uh And actually, given kind of the topics we've talked about here, I have some great posts about kind of what is a recession generically, and it kind of talks about the economic cycle and the stages of the cycle. There's also one that talks about the history of past recessions. So if you want to know, like what caused the last five major recessions, what steps were taken to get us out of it,

and how did we recover? And what did some of these things look like, like how much did the economy decline? How much didn unemployment increase? UM. Again, to that knowledge is power and kind of easing that anxiety, like how long did they last? For example? UM you can find all that at Family finance mom dot com. And I'm off for the summer, but in the fall, the third season of Finance Explained will start, which is my podcast.

UM It covers the top three financial headlines of the week, and then each week is a deep dive, usually an interview sometimes like my own research on a current topic that people are asking that I'm getting a lot of questions about. So those are all places if you want to deepen your financial literacy and your financial knowledge, you can check out Amazing. You have made this complicated topics so much more attainable and understandable. You've just got a

really amazing way of teaching and explaining. So I'm excited for our listeners to get more from you, and thank you for sharing on our podcast. Thank you so much. I appreciate you guys having me. H. Yes, how do you feel after that? Lighter? I think and with more understanding, and it's amazing what just thirty minutes of talking to someone who knows what they're talking about can do for a topic that is really heavy is impacting people. Of course, in areas ways some of us are more concerned and

worried than others, and that is to be expected. But I think hopefully for anyone in whatever situation they're in, could find more lightheartedness or encouragement or hope or at least a tool or a resource or a anchor to help continue moving through this time. I think I'm walking away with new insights on what recession means, on what we've already been facing, what we might face going forward, and and also glad to have a community to be able to brainstorm new ways because we don't always we

don't yet still know what is to come. History can help us understand that a bit knowing what has happened in the past can help to inform the future. But I think also just surrounding ourselves with these amazing people who know and have experienced and various tips, both from those that we interview and those in our community. So

I'm just ultimately hopeful. Yeah, same, I didn't realize that we were so close to UM having a recession possibly announced when we scheduled this interview, and so it just is coming out at the right time. So I think this is gonna be a topic that your friends and your family and your coworkers are going to be talking about. And now you know kind of how if they're worried, you can kind of speak hope into their lives, and when the media is trying to maybe really scare you,

you can UM have some perspective. And so I'm very glad that this episode is releasing when it is, because should they announce that we are in a recession, this is something this is all they're going to talk about for the next month or two, and so to have this perspective, I think it's going to be really powerful

when making spending decisions. I think one of my anchors is going to be just the knowledge about how a recession ends up becoming the title of the time that we're in, just the economic definition of it, being that we've already been in it for six months. And so for me that's a bit of an anchor. Well, how have I done for the past six months? Maybe I've not been thriving, but I'm Okay, I'm still standing, so all right, then keep putting one foot in front of

the other with the things I've already been doing. And if shifts need to be made, then shifts can be made. And if community is necessary, then yes, reach out for support from your community. You need more resources, Let's again reach out to community, take advantage of what's available to us. There's no shame in that, so absolutely so thank you so much for listening. Yeah, thank you for listening to this. And um, if you think it could be helpful for

somebody in your life, share it. This is going to be a really widely talked about topic for the next few months, so please share this episode if you think it could be helpful to somebody. Um, and if you want more support and community. We have a private community where we do monthly money challenges and offer accountability groups. Uh and we always get big wins in there, even during a recession, so we want to share this one from our member Laura. She said, I've been stressed and

overwhelmed recently with an increase of unexpected expenses. Nothing bad, just seemingly a lot out at once. However, today I'm feeling very grateful and i want to share, and she invited people in the comments of our group to share what they're grateful for or happy, excited about, big or small, and she says, firstly, I'm so grateful to Jen and Jill and this membership. Secondly for my accountability group who

are so supportive. Shout out to bills, Bills, Bills. That's we have the best names for accountability groups in in our membership, people continue to amazed me, especially our members just the creativity, the wit, the and the winds. It's so great. So congratulations Lauren and everyone else in our membership who just keeps crushing it. Yes, so thank you

for listening. If you want to check out our monthly challenge, community had to Frugal Friends podcast dot com slash club to see what challenge we have coming up next, see you next week. Frugal Friends is produced by Eric Syrian. Although I guess now that we've got two episodes, it's like see you later in the week. And then I did change. I did change the outline to say see you next time, see you next next time, whenever that

next time might be. For those binging, it might just be one minute from now, Yeah, it might be tomorrow. It might you know, might be in a few weeks when you find the next episode that really speaks to you. But whenever the next time we see you is, we look forward to it. We look forward to hanging out with you. Just with your coffee, are you water? Yeah, we're here with it too. Just my My friend Jenna says that she does listen to this podcast pretty regularly.

Which Pizza Jenna. No, she's not Pizza Jenna. Sorry, I mean she is, but we can't call her Pizza Jenna. I'm sorry. Jenna. Amazing, beautiful, lovely, accomplished, intelligent, witty, phenomenal mother, fantastic wife, beautiful friend. Jenna listens to this podcast too long event regularly. Well, I believe all those things about her, which I don't expected my close friends to actually listen to the podcast, like they're welcome to but like it's

not an expectation for relationship with me. But she texts me regularly. She just texted me today she was excited that about the advertising that was happening on our podcast. But um, a Canadian journalist, his podcast was just advertised Malcolm. We don't, oh Malcolm Gladwell, yeah, yeah, he's an author, he's pretty famous Joe is I know, yeah, I recognized him once I looked him up. But his apparently his Canadian guy, I said, Canadian journalist. I'm not wrong. Um,

he his podcast was advertising on our podcast. She was so excited about it, but I had no idea. That's awesome. We don't have a control over the specific ads people here because they are I mean, you could be listening to when and Are you know, Jenna could be listening to one and the same episode and you get different ads based on where you are. It's pretty fascinating. We still don't understand how it works, but it is really

fun to think about. But we're here for it. Yeah, but we do have control over the types of ads that play. Maybe one day we'll get into that. We'll get into our funny story about our first advertise, advertising that we had to request and then we had to say no to it. So who knows if they're gonna offer us anymore. I know, right, they will have to. We're under contract. They have to. We'll get we'll get in that story eventually. It'll be fun one, all right, Well, sil later