We’re about to feel the full force of the imminent recession so it's crucial you take a look at whether you finances can withstand the inevitable storm.

Think with a recession head on

The last recession gripped in 1991, which means anyone under 35 probably wasn't working when it happened. Over the years of boom, there's been a mentality of stability and growth, and a feeling that prices, earnings, investments and more always go up. So now it's time to get your recession head on, and start to think more defensively.

• Avoid Income Eaters: If you're worried about recession, don't sign up to 'income eaters'. These are products that you MUST pay for every month, like digital TV deals and gym membership. Use the Free Budget Planner to work out your expenditure (External Link)
  
  
• Self Employed Tax: If you're self-employed, remember: for every £100 you earn only £65 is yours. The rest belongs to the taxman so put it aside immediately.  See Martin's Top Savings and Safe Savings guides (External Link).
  
  
• Do a Money Makeover: Do a comprehensive audit of your finances to save as much as possible. Make sure you're on the best deals for everything.  For step-by-step help, read Martin's Give Yourself A Money Makeover guide (External Link).
  

Sort out your cash

The more solid and debt-free your finances are when recession starts, the more chance you have of surviving it unscathed. It's likely to be a strain on all pockets, so lowering your commitments will help.

• Repay costly debts with savings. Pay debts off with any savings or spare cash as it's likely their cost will dwarf the amount you earn on savings.  For a detailed explanation, pros and cons, read Martin's full Should I Save Or Pay Off Debts? guide. (External Link)
  
  
• Get a cash emergency fund. Once you've repaid expensive debts, the next focus is to build yourself an emergency cash pool of three-to-six months' income in case you lose your job.
  
  
• Overpay your mortgage. After that, most people will find overpaying their mortgage is the next best safe use of your cash, though this does depend on the rate.  Use Martin's Should I Pay Off My Mortgage? calculator to help you decide. (External Link)
  
  

Protect yourself from the worst

There are a number of financial self-defence techniques you can use to protect against some of the outcomes of recession.

• Payment Protection Insurance: It's something often ranted about, and not surprising, as many policies are hideously expensive and unsuitable. Yet done right, payment protection insurance will ensure loan, mortgage or credit card repayments are met for a year if you unexpectedly lose your job. It can be worthwhile if bought from an independent provider, rather than with the debt. For more info read Martin's Cheap Loan Insurance guide (External Link)
  
  
• Protect all purchases: In a recession there's a worry that if you buy something, the company you paid may go bust. The way to protect yourself is to pay for anything over £100 on a credit card. Then, by law, you can claim your money back from the card issuer if the retailer goes bust before you get the product. But always pay the card off in full to avoid interest.
  
  It's crucially important to understand exactly how this works. For full details read Martin's Section 75 Q&A guide (External Link)

For more info on everything to do to protect yourself, read Martin's detailed Recession Proofing guide (External Link).