LANSING, Mich. (WLNS) -Inflation is near a 40-year high and the Federal Reserve is hiking interest rates aggressively. That has many economists warning of a possible recession within the next year.

Many countries define a recession as two-quarters of negative growth.

In the US, the National Bureau of Economic Research’s Business Cycle Dating Committee is responsible for determining the beginning and end of recessions. To do so, they analyze different indicators and usually make the call after the fact.

Recessions are part of the economic cycle, with varying degrees of magnitude and length.

To prepare for the next downturn, whenever it occurs, make sure that your emergency reserve fund can cover 6 to 12 months of living expenses.

If you are already retired, consider making that 1-2 years’ worth of expenses, to avoid being forced to sell assets at lower levels just to pay the bills.

Keep this money in accessible savings, checking, or money market accounts.

Next, reduce credit card, or any high-interest debt, especially if you are currently employed.

Finally, if you are considering a job change, be careful not to make a decision that is based solely on more money.

When economies go south, it is often the last person hired who is the first one out the door!