Pulling six figures and still pulling faces — here’s why the prospect of a recession has wealthy Gen Zers panicking, plus 7 tips on how to recession-proof your future

Why are so many people worried about a recession

One of the main drivers of today’s recession fears is President Trump’s tariff policy — especially the introduction of taxes on goods imported into the United States.

Tariffs have become such a major concern that financial firm J.P. Morgan initially estimated the probability of a recession at 40% in late March. However, after Trump announced widespread tariffs would go into effect on dozens of countries — and after several of those countries, including China, began to retaliate — J.P. Morgan raised its estimate to 60%.

The stock market responded by plunging, spooked by fears of rising costs and a potential trade war. This volatility led JP Morgan and others to warn of broader consequences, not just for the U.S. economy but also for global markets.

Beyond tariffs, Americans are also concerned about a recession due to ongoing economic uncertainty. The Trump administration has promoted itself as a change administration, pushing for massive cuts to the federal workforce — changes that could have ripple effects across the broader economy.

Even though the President announced a 90-day pause on tariffs, save for China, recession concerns continue. The back-and-forth over trade policy has only added more uncertainty, making it difficult for consumers and businesses to plan for the future.

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How to prepare for a recession as a young person

The U.S. has been through many recessions in the past, but most young adults haven’t lived through a major one.

While the economy briefly entered a recession from February to April of 2020, that was a unique situation driven by the COVID-19 pandemic. Government stimulus packages helped soften the financial blow for many Americans.

Before COVID, the last major downturn was the Great Recession, which lasted from December 2007 to June 2009. That 18-month crisis was triggered by a collapse in U.S. housing prices, a surge in foreclosures and a global financial meltdown driven by poorly underwritten mortgages packaged into risky mortgage-backed securities.

As a result, many Zoomers haven’t lived through a serious recession as adults. While their concern is understandable, there are several proactive steps young adults can take to shore up their finances including:

• Build an emergency fund with six to 12 months of living expenses — more than the customary three to six months — to create a stronger buffer.
• Make yourself indispensable at work by improving your performance, taking on new responsibilities and showing your value to your employer.
• Build your professional network and develop new skills in case you need to look for new opportunities.
• Explore passive income or side hustles to bring in more income and protect yourself against job loss.
• Creating a bare-bones budget you can live on if necessary, cutting non-essentials to stretch your savings.
• Free up cash to for investing during a downturn. Recessions often lead to lower stock prices, allowing long-term investors to buy the dip.
• Hold your investments for the long term. Avoid panic-selling during a downtown; staying the course gives you the best chance to benefit from the eventual recovery.

By taking these steps, you can increase your chances of not only weathering a recession but coming out strong on the other side. With careful planning and strategic investing, downturns can become opportunities to grow your wealth and build long-term financial security.