Recession-Proof Your Money with a Financial Checkup at Nutmeg

Currently the U.S. economy is enjoying record-low unemployment and high consumer confidence, but there is a lot of speculation that a possible economic recession is coming. Whether this occurs sooner or later, and whether the downturn is short-term or long-term, now is the time to get financially prepared, according to the money experts at Nutmeg State Financial Credit Union.

“Regardless of what is happening in the economy as a whole, it is always important for individuals to save, have a budget and keep an emergency fund,” says John Holt, President and CEO of Nutmeg. “Start by taking a close look at how you spend your money and how well you save.”

Holt notes the most significant thing consumers can start doing today is assessing their monthly expenses to see what is really necessary in their day-to-day lives. Connecticut residents should review their spending on entertainment, prepared foods, alcohol and more based on new taxes that took effect on October 1, 2019. For example, the state’s full 6.35 percent sales tax will apply to digital purchases. That includes single-time buys such as renting or buying a digital movie, as well as ongoing subscriptions like Spotify and Netflix.

“I have seen many friends and family members subscribe to services that end up going unused, like cable television or a gym membership,” says Holt. “Removing any of these extra costs can make a big difference and help you build your savings, which will help you stay secure in the event of a recession.”

In order to help savings grow faster, Holt recommends Certificates and Money Market accounts as great options for yielding high rates of return. Certificates are useful to lock in a rate for a specific amount of time and Money Market accounts are great for ensuring the funds are available when needed. Nutmeg’s financial advisors are available for guidance or if someone just wants to get a financial checkup. For those with investments or retirement accounts, now is a good time to review them for the correct level of risk before the end of the year.

The holiday spending season can easily derail a savings plan. Set a firm budget for gifts and stick to it. If shoppers want to use credit cards, they should use ones that offer rewards or cash back. Then they can save that dividend to make spending on others work to their advantage. An even better choice is to start saving in January to prepare for next year’s holiday shopping. Set up small automatic transfers to a special savings account each week or each pay period. This way, by the end of the year people have saved more than enough without feeling the hit. Nutmeg offers a special Save for a Purpose account that can be used for anything. Members find this account useful because they can open more than one for different needs. Whether for holidays, birthdays, wedding planning, emergency funds or any other specific reason, keeping these accounts separate is a great way to stay organized.

While keeping a savings plan on track is essential to preparing for a rough patch, it is also crucial to reduce any debt. Having excessive debt during a recession can become a burden if not managed properly. Reducing credit card debt has been a common starting point for many people.

“Nutmeg frequently offers credit card debt consolidation specials, including the fall 0% balance transfer promotion happening right now,” explains Holt. “With this option, you can bring over all your credit card debt with no interest for six months. Plus, our card comes with a fixed rate and no annual fees.”

Refinancing other loans like car loans and home loans is also a great option to reduce monthly expenses. Nutmeg’s rates and terms are extremely competitive and can help consumers save money. For homeowners with a high rate mortgage, now is an ideal time to refinance as mortgage rates have dropped in recent months.

“Reducing debt and freeing up extra funds is always a good idea, whether the next recession happens tomorrow or in a few years,” says Holt. “Most importantly, stay focused on the future during a recession. You can take comfort in knowing that the economy typically rebounds within a year or so.”

About Nutmeg
Chartered in 1936 and headquartered in Rocky Hill, Nutmeg State Financial Credit Union is open to anyone who lives, works, worships, attends school or volunteers in the Hartford, New Haven, Middlesex or Tolland Counties as well as the cities of Shelton, Stratford and Bridgeport, Connecticut. They offer members a friendly banking environment and take pride in educating consumers about the advantages of joining a credit union. Visit them at