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When stocks are dropping and even the president won’t rule out a recession, it’s hard not to feel a pit in your stomach. Your investments are one thing, but what about your job, your spouse’s job, or the future of your business or customers?

While none of us know what the future holds, it’s good to be prepared for anything. The best defense is a good offense, as they say. Here are five things to do to protect yourself and make the best of a possible recession.

1. Shore up your financial cushion. One of the most important financial safety nets is readily accessible emergency savings. As a general rule of thumb, you’ll want to have enough to cover at least three to six months of living expenses. This will be your financial buffer if you or someone else in your household loses a job.

One major exception: If you have high-interest credit card debt, consider using your savings to pay that off first. This way you’re not vulnerable to a mounting credit card balance if your income changes. (Depending on how much you owe, you might want to look into a debt consolidation loan or a credit card that features a 0% APR offer on balance transfers. The extra interest-free time might be worth a 4%-5% balance transfer fee.)

If you do have high-interest credit card debt, it’s still a good idea to keep enough on hand to cover one month of expenses. Then, once you’ve paid off your credit cards, you can work on building up that emergency fund. A tax refund is a great way to give this effort a kickstart.

2. Take charge of the parts of your finances you can actually control. You don’t usually have a lot of control over your job security, but you can get your financial house in order ahead of any possible changes in income. It’s a great way to put your nervous energy to good use.

Spending is the biggie. Set a lower monthly spending target to cut back on non-essentials. (SoFi members can use Relay to set targets and track spending right in the SoFi app.) To help you avoid impulse buys, shop with a list. And use loyalty programs, digital coupons and sales to save on necessities. These steps can help you build that emergency savings faster and avoid taking on any new credit card debt.

3. Stick with the long game for your retirement savings. When it comes to 401(k)s, IRAs or other retirement accounts, don’t let market volatility keep you from making your regularly scheduled contributions.

Staying the course is usually the best option for building wealth over the long-term. In the past five years, multiple big market downturns were followed by new record highs, including after COVID-19 emerged in 2020.

And over the past several decades, despite big swings from one year to the next, the S&P 500 Index — the nation’s broadest stock benchmark — has had an average annual return of about 6%, adjusting for inflation.

4. Use market downturns to your advantage. There are a few silver linings to downturns in the stock market.

•   There are more tax-loss harvesting opportunities. By selling investments that have lost value, you can offset capital gains taxes on better-performing investments, reducing your overall tax liability.

•   It can be an ideal time to convert a traditional IRA or 401(k) to a Roth IRA. With a Roth IRA, you pay taxes on your retirement money now, rather than later, to set yourself up for tax-free growth and withdrawals in the future. Since the tax you pay is dependent on your income and the value of your account, converting during a down market or a lower-income year could potentially mean you pay less in taxes.

•   Depending on your risk tolerance, you might want to look for bargains when stock prices are lower. Just remember there are no guarantees that prices will recover.

5. Plan ahead. If you have financial security right now, don’t take it for granted. Capitalize on it. If you’ve been meaning to replace the brake pads on your car or get that mole checked out by the doctor, do it now, while you have a steady income and health insurance. If there’s a great sale on non-perishable essentials like toilet paper or paper towels, stock up. And if your resume isn’t up-to-date or you haven’t kept in touch with old work connections, get yourself ready in case you need to start job hunting. Hopefully you won’t need to, but you’ll feel better being prepared.

Please understand that this information provided is general in nature and shouldn’t be construed as a recommendation or solicitation of any products offered by SoFi’s affiliates and subsidiaries. In addition, this information is by no means meant to provide investment or financial advice, nor is it intended to serve as the basis for any investment decision or recommendation to buy or sell any asset. Keep in mind that investing involves risk, and past performance of an asset never guarantees future results or returns. It’s important for investors to consider their specific financial needs, goals, and risk profile before making an investment decision.

The information and analysis provided through hyperlinks to third party websites, while believed to be accurate, cannot be guaranteed by SoFi. These links are provided for informational purposes and should not be viewed as an endorsement. No brands or products mentioned are affiliated with SoFi, nor do they endorse or sponsor this content.

Tax Information: This article provides general background information only and is not intended to serve as legal or tax advice or as a substitute for legal counsel. You should consult your own attorney and/or tax advisor if you have a question requiring legal or tax advice.

SoFi isn't recommending and is not affiliated with the brands or companies displayed. Brands displayed neither endorse or sponsor this article. Third party trademarks and service marks referenced are property of their respective owners.

OTM2025032401

This article appeared in SoFi's On the Money newsletter. Not getting it? Sign up here.

Funny how our least precious currency has woven its way into our vernacular, sometimes symbolizing something quite valuable.

A penny for your thoughts? That dates back to the 1500s when the British penny was worth a lot more — or at least enough that the offer made sense.

That cost me a pretty penny. Again, mucho dinero.

Would we still use these phrases if the penny didn’t exist, though?

Last month, President Donald Trump said he was ordering his Treasury secretary to stop minting new pennies because they’re so expensive to produce. (In fiscal 2024, the U.S. Mint lost 2.79 cents for every 1 cent it made, or a total of $85.3 million, according to its annual report.)

There would still be plenty in circulation, but how long would that last?

Thanks to inflation, the penny’s purchasing power has fallen more than thirtyfold since 1900, according to the Federal Reserve. And let’s face it, it doesn’t get much respect these days, especially since COVID-19 turbocharged our use of Amazon and Venmo.

In fact, only one-third of consumers carry coins on them anymore, according to a 2022 survey commissioned by the Fed and the U.S. Mint. Another 40% stick them in a jar or piggy bank, with the typical household storing $60 to $90 in coins. The rest throw them in a tip jar, donate them to charity, tell cashiers to keep the change, and even (in 2% of cases) throw them away.

If physical pennies ultimately disappear, will we still rely on 1 cent as a unit of value?

Canada is a test case. They phased out their physical penny in 2013, issuing guidelines that when transactions are in cash, they should be rounded to the nearest 5-cent increment — and only on the total sale price, not each individual item. But there are still plenty of things for $X.99 in Canada’s online shopping world.

In any case, you have to wonder: Will the babies of the latest generation — Generation Beta — look at pennies like millennials look at VHS tapes? Will they know what a “change purse” is or what we used them for? Maybe the zippered compartments of wallets can instead store toothpicks so we keep the salad out of our smile. And we’ll put actual cups in car cupholders.

So what? We’ve been moving away from coins for a while now, at least culturally. The penny’s number seems to be almost up, and the nickel could be next on the hit list. (Unlike dimes and quarters, nickels also cost more to make than they’re worth, though the margin isn’t quite as bad.) And now that they’re on our radar, we can prepare. That contractor dimed and quartered us to death? Hmmm. Maybe not.

Related Reading

•   President Trump’s Order Is Latest in the Decades-Long Effort to Eliminate the Penny (NPR)

•   There Are No Pennies in Canada. Can DOGE Achieve the Same Feat? (Newsweek)

•   Are We Really Headed for a Cashless Society? (Ramsey Solutions)

Please understand that this information provided is general in nature and shouldn’t be construed as a recommendation or solicitation of any products offered by SoFi’s affiliates and subsidiaries. In addition, this information is by no means meant to provide investment or financial advice, nor is it intended to serve as the basis for any investment decision or recommendation to buy or sell any asset. Keep in mind that investing involves risk, and past performance of an asset never guarantees future results or returns. It’s important for investors to consider their specific financial needs, goals, and risk profile before making an investment decision.

The information and analysis provided through hyperlinks to third party websites, while believed to be accurate, cannot be guaranteed by SoFi. These links are provided for informational purposes and should not be viewed as an endorsement. No brands or products mentioned are affiliated with SoFi, nor do they endorse or sponsor this content.

SoFi isn't recommending and is not affiliated with the brands or companies displayed. Brands displayed neither endorse or sponsor this article. Third party trademarks and service marks referenced are property of their respective owners.

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Eye of the Storm

After several weeks of heightened activity driven by economic data, policy uncertainty and central bank decisions, markets might be in for a relatively quieter week ahead.

There are few high-impact economic indicator releases or major earnings announcements scheduled, which creates space for investors to digest recent developments before the next wave of potential market-moving events. With the Federal Reserve’s latest meeting now in the rearview mirror — a meeting where the Fed left rates unchanged — attention will now shift to commentary expected to come from various Fed officials scheduled to speak throughout the week.

These speeches may provide additional color on how policymakers are interpreting recent economic data and, perhaps more importantly, how they’re factoring trade policy uncertainty into their outlook. Comments on these topics would be significant given how much of the recent market volatility has been driven by this uncertainty, especially in light of the fact that tariffs that President Trump has referred to as “the big one” are set to go into effect on April 2. That dynamic could contribute to a subdued trading environment with the potential for bursts of volatility if headlines on trade roll in.

Economic and Earnings Calendar

Monday

•   February Chicago Fed National Activity Index: This is a monthly index put together that incorporates 85 indicators from four categories: production and income; employment, unemployment, and hours; personal consumption and housing; and sales, orders, and inventories.

•   March S&P Global US PMIs: These indexes track how purchasing managers across different industries feel about the business environment.

Tuesday

•   March Philadelphia Fed Non-Manufacturing Activity: The Philadelphia Fed’s survey of services executives in the region on business conditions and their outlook.

•   January FHFA House Price Index: This is a broad measure of single-family house prices released by the Federal Housing Finance Agency.

•   January S&P CoreLogic Case-Shiller Home Price Index: This is a private sector measure of national home prices.

•   February New Home Sales: While only a minority of home transactions in any given month come from new constructions, these home prices tend to be more cyclical and give insight into developing trends.

•   March Conference Board Consumer Confidence: How consumers feel about economic conditions affect their spending habits. This survey places a particular focus on job availability and the state of the labor market.

•   March Richmond Fed Manufacturing Activity: The Richmond Fed’s survey of manufacturing executives in the region on business conditions and their outlook.

•   March Richmond Fed Non-Manufacturing Activity: The Richmond Fed’s survey of services executives in the region on business conditions and their outlook.

•   Fedspeak: New York Fed President John WIlliams will give opening remarks at a conference at the regional Fed bank.

•   Earnings: McCormick & Company (MKC)

Wednesday

•   February Factory and Durable Goods Orders: These metrics give insight into underlying trends for leading cyclical indicators.

•   Weekly Mortgage Applications: Mortgage activity gives insight on demand conditions in the housing market.

•   Fedspeak: St. Louis Fed President Alberto Musalem will discuss the economy and monetary policy.

•   Earnings: Cintas (CTAS), Dollar Tree (DLTR), Paychex (PAYX)

Thursday

•   GDP Third Estimate: The primary measure of economic activity in the United States, which is measured as total expenditure on a country’s goods and services.

•   February Wholesale Inventories and Sales: Wholesalers often operate as an intermediary between manufacturers and retailers, serving as a key part of the goods supply chain.

•   February Wholesale and Retail Inventories: Wholesalers and retailers often operate as intermediaries for the sale of manufactured products, serving as a key part of the goods supply chain.

•   March Kansas City Fed Manufacturing Activity: The Kansas City Fed’s survey of manufacturing executives in the region on business conditions and their outlook.

•   Weekly Jobless Claims: This high frequency labor market data gives insight into filings for unemployment benefits. Jobless claims have continued to show a labor market that remains strong despite having cooled.

•   Fedspeak: Richmond Fed President Tom Barkin will give a lecture at Washington and Lee University, followed by Q&A.

•   Earnings: Lululemon Athletica (LULU)

Friday

•   February Personal Income and Spending: These numbers give insight into how Americans are doing, which is important since consumer spending accounts for about two-thirds of economic growth in the United States.

•   February Personal Consumption Expenditures Price Index: The Fed targets this inflation measure for its price stability mandate and believes PCE to be the best measure of consumers’ spending habits.

•   March University of Michigan Consumer Sentiment: How consumers feel about economic conditions affect their spending habits. This survey places a particular focus on inflation and its trajectory.

•   March Kansas City Fed Non-Manufacturing Activity: The Kansas City Fed’s survey of services executives in the region on business conditions and their outlook.

•   Fedspeak: Atlanta Fed President Raphael Bostic will moderate a panel on housing finance policy at an event at the regional Fed bank.

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Please understand that this information provided is general in nature and shouldn’t be construed as a recommendation or solicitation of any products offered by SoFi’s affiliates and subsidiaries. In addition, this information is by no means meant to provide investment or financial advice, nor is it intended to serve as the basis for any investment decision or recommendation to buy or sell any asset. Keep in mind that investing involves risk, and past performance of an asset never guarantees future results or returns. It’s important for investors to consider their specific financial needs, goals, and risk profile before making an investment decision.

The information and analysis provided through hyperlinks to third party websites, while believed to be accurate, cannot be guaranteed by SoFi. These links are provided for informational purposes and should not be viewed as an endorsement. No brands or products mentioned are affiliated with SoFi, nor do they endorse or sponsor this content.

SoFi isn't recommending and is not affiliated with the brands or companies displayed. Brands displayed neither endorse or sponsor this article. Third party trademarks and service marks referenced are property of their respective owners.