Possibility of recession | How are young Canadians preparing?

(Toronto) “I would be lying if I said that a looming recession isn’t a concern,” says Braveen Kumar, who is currently working on setting up her own independent business.

In a context of soaring inflation and where the Bank of Canada is raising interest rates more aggressively than in its previous tightening cycles, fears of a possible recession are growing. A declining stock market adds fuel to the fire, since market declines tend to occur before a recession hits.

Mr. Kumar recently quit his job in the tech industry and although he managed to save the equivalent of eight months of living expenses in order to make his career change, he is budgeting much more diligently now, because that he has no regular salary.

Camille Horrocks-Denis is a documentary film student, and although she is supported by provincial loans and grants, works two jobs and lives with her partner, the high cost of living in Toronto makes her daily life more difficult and she reflects on the impact a recession could have on someone like her.

CIBC economist Katherine Judge isn’t sounding the recession alarm just yet, but she believes that if Canada does fall into a recession, it could be in late 2022 or the first half of 2023 She does not, however, expect the situation to be as dire as it was in 2008.

“The 2008 recession was unusually deep, and if we were to have a recession this time around, chances are it won’t be as bad,” she said. We expect the Bank of Canada to increase [les taux] slightly less than the market expects, thus avoiding an outright recession if the Federal Reserve [américaine] is also cautious about exaggerating increases. »

Think of yourself as a business

Nonetheless, personal finance experts say it’s imperative to “recession-proof” right now.

For people in their 20s and early 30s, the COVID-19 pandemic has been the biggest global event they have faced as working adults, and it has forced many of them to examine their finances more carefully and even re-examine their career path, putting them in a position to maintain the momentum of their personal growth.

Kelley Keehn, a personal finance educator, thinks “recession preparedness” is largely about how young adults shape their career trajectories.

She believes that people should think of themselves as a business.

She also stresses the importance of expanding one’s skills — through certifications, courses, books, and even following trusted social media channels and influencers — so that realigning oneself with the world becomes easier. labor market, if necessary. Continuing to network is just as important, if not more important, she adds.

Marketing professional Ankit Mishra says he’s “quite concerned” about a possible recession and is honing his skills accordingly, learning French and researching industries that could be resilient in an economic downturn. In his case, he explores how technology could improve life in cities and learns about sustainability in the mining industry.

On saving and spending amid high inflation and recessionary concerns, Ms.^me Keehn believes it is important to carefully consider whether certain activities or purchases will actually add value or end up hurting the bank account. This is especially true as the world reopens and spending opportunities increase.

She also urges young people to carefully assess their financial abilities and limits before investing in the stock market, even during the market upswings we saw after the March 2020 sell-off and into 2021 – a period that has encouraged many young people to get started with the hope of reaping big gains.

She talks about her own investment mistakes, made when she was much younger, in particular, when she put money in the market before she could really handle the implications, only to be forced to do it. withdraw when it was at a loss.