Preparing for a Recession: Decisions Have Consequences

With fears of a recession looming, if there’s one thing consistent about my videos and blog, it’s that I try to make you understand that this is personal. This isn’t an investment website where I tell you, “You must buy this stock,” or “This is the stock I’m recommending.” It’s quite the opposite. What I’m saying is: be prepared, be informed, and how to be prepared is unique in the case of a recession.

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Right now, it feels like we’re heading headfirst, 100 miles an hour, towards a recession by the end of the year. Top economists, whether it’s Goldman Sachs or JP Morgan Chase, are saying there’s a 40–50% chance of a recession. Those are odds nobody likes. I’ve been saying for months now: Be prepared for what’s coming because it will affect us all. Your political opinion will not shield you from a recession.

A Recession Affects Us All

My wife and I have been going back and forth about this. The last hurricane was a total loss for her car, which meant a few grand out of pocket to buy a new one. Then came the issue with my camper—it should have been a total loss, but the insurance company messed up. Honestly, I’m glad they did because I didn’t feel like taking out more money to buy another camper.

• How to Handle a Total Loss on Your Car or RV

We’ve been discussing hurricanes and how sick we are of them. We’ve been talking about moving out West. That area—the topography, the mountains, the canyons—is what we love when we go camping. Camping is the only vacation we take. It’s our way to relax and unwind. We’ve already done enough trips to know that’s all we like to do.

I’ve wanted to move out West since 1994. I blame Boulder University for not accepting me into their law program. But when we started traveling together, she liked it out there, too.

We almost moved in 2015 but decided against it at the last second—it just wasn’t to our advantage. Now, we’re talking about it again because of those hurricanes. I told her, “We’re OK. We’re going to go.” When Hurricane Helene hit, I said, “Let’s just sell and go.” We spoke to a realtor, but I decided we should get rid of some debt first. We can do this all in less than a year, and then we’ll make our decision to sell, pocket the equity, and buy a new place in a new state out West.

What are we going to do—sell or not sell? My wife said, “You know what? Let’s just keep moving forward.” In the middle of all this, she got a promotion, and now it’s a debate: Are we going to go? Are we not going to go? On one side, we’ve got her promotion here; on the other, we’ve got hurricanes.

We still want to move out West. She works for corporate America, so transferring isn’t a big deal. We’ve already looked into the town we’re considering, and we know she can just say, “I’m going,” and that’s it. But now we’re dealing with this idiotic tariff war, aka “Liberation Day,” and the possibility of a recession.

• Liberation Day is Here. Are You Prepared?

So it got me thinking: I wonder how many other people are in the same position, preparing themselves for a recession. I’ve seen posts on social media—people saying, “I’m not remodeling my house this year like I planned,” or “I’m putting off this or that.” And I think, yeah, that’s exactly what I’ve been advocating: don’t make big moves because we just don’t know right now, and if nothing changes, a recession is inevitable.

I’ve said a thousand times that I hope the recession surprises us all in a positive way—where the economy turns around and we’re all making great money. But in case that doesn’t happen and we do face a recession, we need to be prepared. No matter how prepared you are, though, it never feels like enough.

Sometimes Knowing Isn’t Enough

I remember the mortgage foreclosure crisis—I saw it coming. For me, the writing was on the wall. Forget what the experts were saying; just talking to my clients, I realized, “How are they affording these kinds of homes on these kinds of salaries?” That got me digging into subprime mortgages, and I knew it was time to act. I decided to sell my house before it hit the fan. My plan was to flip it, buy a townhouse outright with cash, and wipe my hands clean of a mortgage.

But then came hurricanes Katrina and Wilma, which caused substantial damage to my house. That’s why I’ve got issues with hurricanes. More recently, Helene damaged my car and camper. No matter how prepared I was, I wasn’t prepared for something like that—how could I be? By the time my house was fixed, the housing market had crashed, and my house was underwater. I ended up turning in the keys to the bank and saying, “This baby’s all yours.”

Now, here I am, more than 20 years later, reflecting on all of this. No matter how much we think we’re ready, there’s always something unpredictable waiting around the corner.

The mortgage foreclosure crisis was in 2008, and hurricanes Katrina and Wilma were in 2005, so yes, it’s been 20 years—a 20th anniversary I’d rather not celebrate. We’ve been looking at all the angles of our situation, asking, “Can we go?” I initially said, “Yeah, we can,” but then reality hit, and the current economic insecurity the United States is facing, so we reconsidered. Unfortunately, I’m getting Great Recession vibes.

I keep thinking, “Who else is in this position?” For example, I was planning to buy an aluminum shed to cover my camper. Removing those black streaks on the camper is such a pain—it’s tedious and time-consuming. But then, with the Trump tariffs, the price will jump from $9,000 to over $12,000 for the exact same shed. There’s no difference—it’s not bigger, taller, or prettier. It’s the same thing, just more expensive.

That got me thinking: Is now the right time to spend $12,000 on something like this? I doubt I’d make that money back when we sell the house. It’d feel like throwing $12,000 down the drain, especially if the next buyer doesn’t even own a camper. At least with a garage, I know I’d get my money back because it’s an enclosed space with broader appeal.

So, for now, I made a temporary fix. For about $80, I bought a nylon topper and reinforced it with some 2x4s on top of the roof to keep it from blowing away in the wind. It’s not perfect, but it’ll save me time waxing the camper for now. Spending $12,000 just doesn’t make sense in this climate.

With a Recession, It’s Hurry Up and Wait

As for moving cross-country, it’s the same debate. My wife might walk into a supervisor role if we move, but what happens if things go bad and the company starts cutting jobs? I told her, “Chances are, it’s first one in, first one out.” At least here, her job feels secure. Even if there are cuts, we likely won’t have to worry. But moving out there? It’s not guaranteed to be the same.

Instead of wondering if we’re the only ones in this position, which is clearly a “Captain Obvious” realization, we’ve been reflecting on our situation. Even though we want to go and technically can go, maybe now just isn’t the right time.

Sure, we’ll pay off the debt within the expected time frame, and that is a key step during a recession, but that’s not the real issue. Right now, taking on mortgage debt might seem okay, but what happens in six months? Will things be easier then? Maybe I’ll get a large deposit, but so what? That might not be enough to excite the banks.

Interest rates could climb higher, making homes less affordable, or they could drop, increasing home values. But then I’d sell this house for more, only to buy another one at a higher price, potentially diving deeper into debt. This is besides the fact that buying the same home that we have now would cost us $100,000 plus as of right now.

Ultimately, my conclusion is clear: Now isn’t the time. And that’s what I want everyone to understand. Maybe now isn’t the right moment to act. You have to imagine the possibilities, look into your “crystal ball,” and ask, “What could go wrong?” Murphy’s Law teaches us that if something can go wrong, it often will (pointing to Murphy’s Law statute on my desk).

I prepared for the mortgage foreclosure crisis. To me, the writing was on the wall—loud and clear. I saw all the signs: faxes, figurative smoke signals, everything telling me this was where we were heading. And yet, even with all that preparation, it wasn’t enough to avoid its impact.

Now, unexpected things can still happen. Another hurricane could destroy this house and put me back at square one. I’m fully aware of that possibility. But in such a case, it wouldn’t matter—I’d take my money and leave as quickly as I could.

This is the issue we’re all facing, and that’s why I’m urging everyone: be cautious about what you do. Now might not be the time to take big risks.

Think Before You Act

This may not be the time to remodel your home. Sure, I’d love to have that roof over my camper—it’d be so convenient. I could wash my car under it, park without worrying about angles for shade, and wax my car anytime I want. But right now, it’s a $10,000–$12,000 luxury item I don’t need, especially with the uncertainty in the economy. That’s how we all need to approach these decisions: Is now really the time?

I’ve been cutting back on projects, even at Home Depot—a place I practically live at. They should give me a job there! But for now, I’m saying, “I don’t know.” My credit card company even congratulates me for spending less month after month, and I thought, “Yeah, because I’m cutting back.” Now isn’t the time to buy more tools or take on more projects. I’m sticking to the bare minimum until things settle down.

We’re living in chaos right now, and I’ve said it a hundred times: Chaos creates political instability, and political instability leads to financial instability. I’ve been through financial instability before, and I don’t like it. I saw it firsthand during the 2008 mortgage foreclosure crisis.

None of us had ever experienced anything like it, and it was a disaster. My business had to prepare for it, and personally, I took steps to get ready—selling my house and downsizing because I didn’t need such a big place for just me. Those were steps I took back then, and I’m taking similar steps now. You should, too.

We don’t know what’s going to happen tomorrow. We never do. But when things are calm and settled, we have a better idea of how to move forward. Right now, even transferring jobs—something that’s usually straightforward—feels risky.

If it’s “first one in, first one out,” we could travel 2,000 miles just for my wife to end up unemployed. We could’ve stayed here and been unemployed without all the hassle. There’s no need to go that far for the same outcome.

Regardless of Your Political Opinion- We Are All in This Together

These are the questions we all need to ask ourselves: Any changes you’re going to make—what should they be? What are the angles? What are the risks? There’s no denying that this economic situation is affecting everyone in different ways.

Parents might be reconsidering private school for their kids or even pulling them out. They may be hesitant to co-sign student loans, worried about how it could impact their own financial future. Some might’ve already taken on more debt, buying a car to avoid the impact of the 25% tariffs on vehicles and other goods.

Every situation is unique, and that’s why it’s important to sit down, write everything out, and analyze the angles. Ask yourself: Is this the right time to put my child in private school? Is this the time to remodel my home? Or even, should I skip that vacation this year? That’s not a bad idea. If you’re about to spend $2,000, $3,000, or more, maybe holding back or opting for a staycation is the smarter move. It’s funny—I haven’t heard the term “staycation” in a while, but I bet it’s going to make a comeback soon.

This approach is personal, and that’s why my blog focuses so much on personal finance. I have sections divided by topics like personal bankruptcy and business news, such as my recent post about Hooters filing for bankruptcy. There’s also a “Morning Coffee” section, which tackles financial topics from a different angle. And then there’s the “Personal Finance” section, which emphasizes understanding your situation.

Forget what your friends are doing—it doesn’t matter. Some might be making the right decisions; others might not be. What’s important is learning from what they’re doing and figuring out how to apply their experiences to your situation, especially if you’re in the same industry, have the same job, or are facing similar circumstances.

These are the small steps we all need to take to prepare ourselves for what’s coming. The tariffs are just starting to take effect, but by the end of the year, you’ll definitely feel it.

At the federal level, we’ve witnessed endless firings, but it’ll take time for the ripple effects to reach the private sector. That’s when it’ll truly start to affect us personally. In fact, you might start to notice it within the next month or two, like grocery bills creeping higher.

The Long-Term Outlook Will Cost Us

The sad part is that this isn’t going away anytime soon. Chances are, once the price of a product goes up, it will not come dow,n no matter how strong the economy is. Businesses will take the approach that consumers have already adjusted to the new price and will keep it there.

In Florida, I’ve said this before, and I’ll say it again: Every state is nickel-and-diming us to death. They won’t outright announce a property tax increase of, say, 8% because they know people would riot. Instead, they’ll gradually push that increase little by little until they hit their goal. It’s a tactic I’ve noticed over and over.

Take the example of front license plates in Florida. I’ve been driving since I was 16—I’m 53 now—and suddenly, we’re being told we need front license plates. How did we manage all this time without them? It’s just another way to generate revenue. They avoid calling it a tax hike, but ultimately, it’s designed to raise money, likely a few hundred million dollars.

Another example is utility costs. Duval County in Jacksonville is increasing utility rates, and I can see other counties following suit. Local governments are getting creative to find ways to increase revenue without framing it as a tax.

Now, you might ask, “What does all this have to do with Florida?” Well, it’s not just about Florida—it’s everywhere. This isn’t a situation where a recession will only affect red states or blue states. It’s going to impact all of us.

In a prior video and blog post, I talked about the Department of Education and how its funding cuts will affect everyone. I don’t have children, but even I will feel the impact. On average, 11% of school district funding comes from the Department of Education.

Some districts might get more, some less, but that’s the average. If your district loses that funding, it’ll have to get creative to make up for it. That’s where things like front license plates, utility rate hikes, and other small changes come into play. These are ways to generate revenue without outright raising taxes.

They won’t announce an 11% tax hike because people would riot. Instead, they’ll gradually increase sales taxes, tourism taxes, or other fees by small percentages over time. It’s a slow creep, but it adds up. The problem is that everything ends up costing more while wages stay the same. That’s the real issue—it’s what drives people into debt. And it’s what I’ve been advocating against from the start.

Student loans are another big issue. How much will people have to pay? Nobody knows yet. We don’t even know where the loans are going—will they be handled by the SBA or the Department of Treasury? Neither has dealt with student loans before, so it’s bound to be a mess. And once they figure it out, will they come up with outrageous numbers, like requiring $1,000 a month? If people don’t have it, they can’t pay it—you can’t squeeze blood out of a stone. That’s not the concern, though. The real issue is how these payments will stack up alongside other expenses.

For example, if you haven’t been paying your loans post-COVID and now you’re told to pay $300 a month, and you’ve also bought a car to avoid tariffs on older vehicles, that’s another $300. Suddenly, your expenses have jumped by $600 a month. Then come the front license plates, sales tax hikes, property tax increases, and other fees your city or state might impose. Before you know it, that $600 turns into $700, and by the end of the year, you’re thousands of dollars deeper in debt.

This is the problem with the recession—it’s making everything more expensive. The question is, how do you prepare for it? For me, that meant skipping the $12,000 aluminum carport for my camper and opting for an $80 topper from Amazon instead. I’ll deal with the bigger expense another day.

As for moving cross-country, it’s not happening right now. I don’t know what the next 12 months will bring, and I’m not spending $10,000–$15,000 to move just for my wife to potentially end up unemployed six months later. We could stay here and face unemployment without the added stress of relocating. It’s about making life easier for both of us.

If an opportunity in real estate comes our way that is impossible to reject, then we will rethink it. We’ve already discussed maybe buying a home in cash, a fixer-upper, and being mortgage-free means we can upgrade the home to our liking. So, needless to say, we are being creative and flexible.

These are the kitchen table discussions politicians talk about—the real issues we face every day. And that’s why I keep saying: be prepared. Chaos creates political instability, and political instability leads to financial instability. We’ve seen the chaos, we’ve seen the political instability, and now we’re feeling the financial instability. That’s just the way it is, and the only way around it is to be prepared. I

I’m sending good vibes your way—may you find financial freedom and a ton of success. Take care of yourselves and stay safe! And as I once read, I heard there’s a recession going on. I decided to not participate.

Colleges and universities can purchase my bankruptcy law textbook directly from Routledge Publishing. For paralegals and students buying single copies, you can do so via Amazon Books. To access my YouTube channel, click this link. You can also listen to my podcast on Spotify.

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