Inflation is at a 40-year high, interest rates are rising, and consumer confidence is waning. While experts have disagreed on whether we’ve entered a true recession, we know that the economy is cyclical and downturns are inevitable, so it’s essential to prepare for rough economic times. Read on for tips to help make sure your finances are recession-proof.

Revisit Your Budget

Inflation has been on the rise for months now, so if you haven’t taken a hard look at your spending and made adjustments where necessary, now is the time do so. Review bank accounts and credit card statements to identify costs that can be pared down or eliminated. Your goal with budgeting should be to ensure you are living within your means, and widening the gap between net income and expenses as much as possible. Any money left over in your budget can be allocated to savings and investments.

Boost Emergency Savings

Speaking of savings, building an emergency fund is crucial when preparing your finances for a recession. After all, you don’t want to be forced to rely on credit cards just to get by. Aim to put aside 3 to 6 months of your basic living expenses in an emergency fund. Basic living expenses account for essential costs like housing, food, utilities, and transportation. If you’re feeling extra ambitious, set a goal of saving 12 months of basic living expenses. If building an emergency fund feels daunting — whether 3 months or 12 months is the goal — remember that even small, consistent contributions will add up in the long run.

Pay Down Debt

Credit cards typically charge variable interest, and with interest rates rising, you’re going to want to tackle debt now. Focus on high-interest credit cards first, then move to fixed-rate debt. Fewer monthly bills mean more funds can be used for necessary spending and building up your emergency savings.

Don’t Pull Investments

During a recession the stock market could fall as much as 30 to 40 percent, so it’s tempting to pull investments and retirement funds, but you don’t want to make any gambles with your long-term financial security. Whether you are 25 or nearing retirement, your best move is to stay invested and wait out the storm. Keep in mind that history has proven that bull markets (rising market conditions) last longer than bear markets (falling market conditions).

Rebalance Your Portfolio

It’s true that you want to keep your money invested during a recession, but you might think about rebalancing to keep your portfolio on track. Portfolio rebalancing means adjusting investments to a new asset allocation plan. When the stock market is volatile, investors might decrease their stock investments and increase fixed income or bond allocations, which are less volatile; however, you should always consult with your financial advisor before making any major changes to your portfolio.