Insider’s experts choose the best products and services to help make smart decisions with your money (here’s how). In some cases, we receive a commission from our our partners, however, our opinions are our own. Terms apply to offers listed on this page.

• Financial planner Adrianne Yamaki, who only works with millionaires, has advice for a recession.
• She recommends increasing your cash reserves now; you’ll want cash to invest when stocks are cheap.
• She also recommends against taking on new (and expensive) debt, like a mortgage or business loan.

With inflation at an all-time high this year and endless fears about a looming recession, it can be hard to enjoy the holiday season without a clear understanding of how to protect your finances.

To help figure out how anyone can continue to recession-proof their finances as the year comes to an end, financial planner Adrianne Yamaki, who only works with millionaire, shared the tips she gives her clients.

1. Increase your cash reserves 

In addition to paying attention to your budget and your overall spending, Yamaki says now is the time to increase your cash reserves as much as possible.

“A recession means your bonus and stock compensation are likely lower,” says Yamaki. “You can absorb unexpected expenses more easily with available liquidity.”

Yamaki says the upside is that, during a recession, so many discretionary activities, like travel, are cheaper, so you can take advantage of a slower economy to increase your leisure.

Finally, when it comes to your cash, Yamaki says a good strategy is to think of it not just for short-term spending, but as a powerful tool in your portfolio management.

“For example, use cash to make acquisitions as prices decline, in equities, real estate, or other assets,” says Yamaki.  

Her approach is simple: Buy when others are selling. 

2. Control your debt 

Yamaki says one way to prevent struggling during a recession is to see what you can do about lingering debt now, before the economy gets worse.

If you’re considering taking on any additional expensive fixed overhead costs, like a large mortgage or business loan, at high interest rates, Yamaki says to think through this to make sure it’s the right move for the future.

“Before locking yourself into such costs, envision if you could still make the payments if your income were 70’% of what it is now,” says Yamaki. “If not, consider forgoing the loan.”

3. Adjust your investment strategy 

While dips in the stock market and a looming recession might make you freeze up when it comes to your investment strategy, Yamaki says that using this time to reflect and reposition your money might help you immensely in the future.

“Expansions don’t last forever,” says Yamaki. “Neither do recessions.”

Yamaki says that having that mindset can help you rebalance and diversify your investments during a potential recession. While your capital gains might be smaller, she says investments might be less expensive to make now, which can help you reposition yourself, and your  finances, for eventual recovery, especially if you wanted to start investing in new index funds or market categories.