I'm 26, earn $90K a year and save $7K annually for my 401(k). I spend $2.5K a month on expenses but tariffs have me worried about a recession — how can I prepare for a financial downturn?

Boost your emergency fund

Unfortunately, recessions have the potential to lead to higher levels of unemployment. You may have a good job now, but if a recession hits, that could change. And since you’re 26 and earning $90K, the danger lies in potentially struggling to find a new job that gives you that same income (unless you happen to be in a lucrative field where $90K salaries aren’t unusual).

That’s why it’s important to boost your emergency fund — and if you don’t have one, it’s time to get one started. Saving money in an emergency fund can not only help to get you through a period of unemployment — allowing you to cover your bills without taking on debt — it can also help to keep you relatively stress free as you search for a new job.

At 26, you may not have the most experience, so it’s important to have a financial cushion in case you end up needing time to learn certain skills in order to get hired again.

Financial experts typically recommend saving enough in an emergency fund to cover three-to-six months' worth of expenses, but if you can, you may want to aim for the higher end of that range. If you don’t yet have three months' worth of expenses saved, you may want to cut back on 401(k) contributions until you have established more of a near-term safety net.

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Avoid taking on new expenses

If you’re 26 and steadily saving $7K a year, that’s an indication that you have a pretty good handle on your spending. But you should be aware that now may not be a great time to take on any new expenses.

If you happen to lose your job in the near future, the last thing you’d need is to be committed to bills that are higher than the $2,500 a month you’re already on the hook for. To this end, you may want to hold off on upgrading your car, or moving into that larger apartment that just became available in your building, which will raise your rent costs by $200.

If anything, now’s the time to scale back on expenses so you can boost your savings and give yourself more of an emergency cushion.

Boost your income

You don’t necessarily have to worry about a recession wreaking havoc on your 401(k). First of all, recessions don’t always go hand-in-hand with stock market downturns. And secondly, since you’re 26, you have plenty of time for your retirement savings to recover from a hit.

But what you should do is try to boost your income so that if you wind up losing your job, you’ll have a backup stream of income to fall back on. To this end, it pays to explore your options for getting a side hustle.

A good 45% of today’s working Americans have a side hustle, according to Self Financial, with the average side job earning $688 per month.

If you started working a decent side hustle and eventually got laid off from your main job, that side gig may then give you the option to ramp up your hours and grow that income stream while you look for full-time work. And in the event that you aren’t laid off from your main job, the extra money you earn from the side hustle could be your ticket to boosting your emergency fund and/or paying down debts you may owe.

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Network proactively

Losing your job could be a big blow to your finances at 26. And if you only have limited work experience, it may be tough to find a new job — especially at a time when many people could potentially be looking for work as well.

That’s why it’s a good idea to build up your professional network before a recession hits. You can do so by attending networking events in your area, going to industry conferences or even just digging around on LinkedIn for additional connections.

It’s also a good time to check in with former college professors — people you might turn to for recommendations in case you end up looking for work. You may be a few years removed from college, but it’s easier to ask for that favor when it’s not totally out of the blue.

It’s also a good time to reconnect with old classmates you may have lost touch with, especially if they studied in a similar field. You never know who might be in a position to submit your resume to a hiring manager, so the more contacts you have, the better.