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The Bank of Canada has increased interest rates six times this year, making borrowing more expensive and saving more difficult for Canadians.

With all this economic uncertainty, The Globe’s daily news podcast The Decibel hosted a conversation live on Twitter with three personal finance experts. Rob Carrick, Erica Alini and Melissa Leong discussed how young adults can prepare financially for a potential recession. Here are seven financial tips from the conversation.

You can listen to the full Twitter Space conversation here.

Which financial goals should you prioritize right now?

The first order of business is to build a minimum emergency fund, says Alini. One month of expenses is the “absolute bare minimum” you need saved up, and a good place to start.

Next she recommends making progress on expensive debt like a line of credit with high interest, or any debt with a looming payment shock. For instance, a fixed-rate mortgage that’s coming up for renewal means higher monthly payments around the corner, so now’s a good time to make a bigger dent in your principal with a lump sum payment.

Finally, Alini recommends boosting your emergency fund further to at least three months of expenses. If you still have some wiggle room afterwards, consider long-term savings and investing.

RRSP: What is a registered retirement savings plan in Canada?

How can you save money during an economic downturn?

Dealing with high interest rates and inflation can be especially stressful for young people and families. But even during a slowing economy, you might still be able to find ways to save money, says Leong. “Often we get stressed about money, we bury our heads in the sand,” says Leong. “But I promise that clarity brings comfort.”

The first thing she recommends is looking at your own bank accounts and categorizing your expenses. Cutting discretionaries is the easiest place to start, but also look at your fixed expenses and call your service providers to see if you can find a better deal. Leong also recommends looking to see if there are grants you can apply for, check the CRA website for uncashed cheques, and download price-comparison apps like Flipp.

TFSA: What to know about tax-free savings account limits, calculating contribution room and more

What are the dos and don’ts of saving in a slow economy?

  • Do put your savings into high rate savings accounts. “Right now you can get between two or three per cent [at some credit unions]. Get a maximum return,” says Carrick.
  • Don’t leave your money in a big bank savings account. “They’re paying next to nothing right now,” says Carrick.
  • Do keep two buckets of savings: one for emergencies and the short-term, and another for investing in the long-term. You want to add to both buckets.
  • Do automate small amounts of transfers towards your savings. Once you get used to your new budget or your income increases, bump up your monthly savings. Small amounts on a regular basis over a long period of time can make a significant difference.
  • Do remember that reaching your financial goals takes time, and saving a little bit is better than nothing. Personal finance is a long-term game. “Don’t beat yourself up if you’re not where you think you should be,” says Carrick.

What’s in store for Canada’s job market and how can I prepare for potential job losses?

A recession could mean job losses, in which case emergency funds are more important than ever, says Leong. An emergency fund can float you through hard times, and give you some breathing room when jobs are hard to find. But right now, with Canada’s job market still strong, Canadians whose finances are squeezed could take advantage of side jobs to bump their income, says Alini. In the long-run, working two jobs is an indication that you should make career moves, she says. But when done for small periods of time, they’re a good way to achieve short-term financial goals like building a safety net or paying off debt.

Is a market downturn the right time to start investing?

As a beginner, it can be gut wrenching to see your investments shrink as the market goes down. But a downturn can be a great time to jump in and invest, says Carrick, because it allows you to buy low. Making moves in a bear market can position new investors well for a future market rebound, when bonds and stocks you bought at a low price start gaining value again. Both Carrick and Alini recommend using diversified portfolios and planning for long term goals, such as retirement. Despite some setbacks on the horizon, a portfolio diversified over companies and industries should pay off in the long term.

Should I buy a home now, or wait another six months?

Rising interest rates have already impacted Canada’s housing market, with house prices dropping across the country, according to Canadian Real Estate Association data. But home prices are still significantly higher than they were two years ago, especially in some Toronto suburbs and less populated areas in Ontario. When deciding the right time to buy, Carrick says to remember that as soon as house prices start decreasing, more people will jump into the market too.

“We underestimate Toronto housing,” says Carrick. “With high immigration, there’s going to be a bounce back in the market. So instead of worrying about picking the bottom point, buy when you can afford the house you want.”

Should I opt for a fixed rate mortgage or variable rate mortgage?

As Alini explains, it depends on what you’re looking for. “With fixed you are buying peace of mind. You don’t have to worry about what the Bank of Canada does,” she says. “But If we’re close to the peak, variable rates mean you have a chance to ride the rates down.”

When interest rates rise, homeowners pay more in interest. However, not everyone will see their monthly payments increase when rates climb. Some variable-rate mortgages keep payments steady up to a certain point – known as the trigger rate – even as the interest rate moves up. Instead, these borrowers pay more interest and less on the principal monthly, and see their amortization period extended.

More reading:

How much money should be in my emergency fund?

What is the stock market and how does it work?

How to start investing with little money

Should you use an app to track your spending? Or a spreadsheet? What about cash-only budget?

Mortgages 101: What to know about fixed vs. variable rates in Canada

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