In a Nutshell
A recent Credit Karma survey shows a majority (56%) of Americans are worried a recession will hit in 2019, and many (68%) have already taken actions to prepare. We have tips for how to handle personal finances in uncertain times.Rarely has America’s economy looked so good.
Unemployment is at a historic low, real wages have finally been increasing, and GDP has grown at a sharp clip in recent years.
But on the heels of a volatile year’s end for the stock market, some have likely begun to wonder whether the good times may soon come to an end.
In fact, a majority (56%) of Americans are worried a recession will happen this year, according to results of a recent Credit Karma survey conducted online by The Harris Poll among over 2,000 U.S. adults. And many (68%) have already started preparing, with some stashing more into savings each month (23%) and others staying put in steady jobs (18%). (Learn more about our methodology.)
Of course, no one can say for sure when the next economic slump will happen. But if you’ve felt some recession fears start to creep in, apparently you’re not alone. Our survey shows just how Americans are feeling in the current economic climate and some of the actions they’re taking in response.
Key survey findings
| A majority of Americans (56%) are worried a recession will hit this year. |
| Half of Americans (50%) believe a recession would have a negative impact on them financially. Meanwhile, 17% have no idea how it would impact them financially, and 6% think it would actually have a positive impact. |
| 68% of Americans have already taken actions to prepare for the next economic slump, including limiting their nonessential spending (33%), decreasing credit card use (27%) and increasing their savings each month (23%). |
Just how worried is America about the next recession?
Even though the economy still seems to be in fine fettle, it’s quickly becoming a question of when, not if, a recession will hit. When it happens, it could mean financial hardship for many, which could be especially painful for those still recovering from the Great Recession.
If that concerns you, you’re in good company. According to the survey, a majority of Americans (56%) are either somewhat or very worried about a recession taking place in 2019.
| How worried are you about a recession occurring in 2019? | Percentage of respondents |
| Very / Somewhat Worried (Net) | 56% |
| Very worried | 11% |
| Somewhat worried | 45% |
| Not At All Worried / Not Very Worried (Net) | 44% |
| Not very worried | 32% |
| Not at all worried | 12% |
In addition, more than two-thirds of Americans (a full 68%) report already having taken some action to prepare for a potential upcoming recession. Here’s a list of some of the things people are doing:
| In which of the following ways have you prepared for a potential upcoming recession? | Percentage of respondents who have done something to prepare |
| Limited spending on non-necessities (e.g. luxury items, entertainment, travel) | 33% |
| Decreased spending on credit cards | 27% |
| Increased amount put in savings each month | 23% |
| Stayed at a stable job (i.e., instead of looking for a new one or being unemployed) | 18% |
| Changed investment strategy | 15% |
| Spoken with a financial advisor | 10% |
| Postponed medical care | 8% |
| Taken on another job | 9% |
| Other | 2% |
*Respondents could select more than one answer
It’s hard to know how to best prepare for hard times. But working to improve your credit and minimize your debts today is always a good strategy to help you feel financially stable.
Tips for managing your finances during uncertain times
Establish an emergency fund
A 2018 Federal Reserve report said 40% of Americans couldn’t readily cover a $400 emergency expense. Don’t let this describe your situation. Make a conscious decision to build an emergency fund over the next year — even if you can only contribute a few dollars here and there. Make it a priority to save up as much as you can for unexpected expenses by the end of this year.
Maintain regular payments on your credit cards and other bills
Doing this can help your credit remain healthy. Having healthy credit can be especially important in times of economic hardship because banks and other lenders can choose to tighten their lending standards when the market turns south. The lower your credit scores, the riskier you can appear as a borrower. And the riskier you appear, the harder it can be to get approved for loans and other financial products — especially when lenders tighten their standards.
Work on building your credit and track your progress
Typically, one of the first things lenders will look at to determine your borrower risk is your credit. If you’re worried about your credit, use this time of relative economic stability to build your credit health. Credit Karma offers tips on how to do this and, if you’re a Credit Karma member, you can check your VantageScore3.0 credit scores from TransUnion and Equifax for free any time without hurting your credit. Checking your scores regularly can help you stay on top of your progress and address any potential issues that crop up.
Methodology
This survey was conducted online within the United States by The Harris Poll on behalf of Credit Karma from January 2-2, 2019 among 2,005 U.S. adults ages 18 and older. This online survey is not based on a probability sample and therefore no estimate of theoretical sampling error can be calculated. For complete survey methodology, including weighting variables and subgroup sample sizes, please contact pr@creditkarma.com.