Irish financial expert Eddie Hobbs recently suggested that Ireland could be facing a recession as early as this autumn.
In an interview with the Irish Mirror, Hobbs said: “We will likely be in recession by early autumn, but definitely by winter.
"All the signs are there. Right now, we are in a vortex, on the way to recession.
"We’re looking at the economy contracting, job losses, business closures. It’s a f**king firestorm.”
The impending threat of a recession has left a lot of people worried and wondering what exactly it means for them.
We spoke to Andriu Mac Lochlainn, director of Murray and Spelman Financial Services, to hear what advice he would give to families.
Firstly Andriu believes the word recession causes fear and it’s important to understand what it actually means.
“The word recession is two negative quarters in a row,” he says.
“And when we talk about GDP, you know, the advice you give to someone when there's a so-called recession versus a so-called boom, it's actually going to be very similar, if not the same.”
He says people tend to worry about making dramatic changes, but this is not necessarily needed.
“People get worried about what I need to do, to do something different but effective. If they are getting good advice and they have a good financial plan, things aren't going to change dramatically.
“If they have a clear financial plan in terms of what they want to do, their goals, they're obviously going to be very important, the budgeting is going to be very important.
"So are you spending too much money on discretionary stuff? And that's going to vary from person to person.”
Andriu also advises to try and pay off any debt you may have to try to build a safety net of funds.
“It's always good advice to pay off or pay down debt, particularly the higher interest rate stuff if you’re able to.
“And it’s hugely important to build up a safety net, people may refer to it as rainy day funds, for six months, your net salary, or if it's two people, their combined salaries, so that they’ve a clear goal.”
Yet it is important to understand that this can be easier said than done for some people.
He says: “That might be really easy for some people but for others it might be really difficult,” he says, “but anything people can do is always going to benefit and having that safety net or that little buffer can give people reassurance when they come into financial distress.”
He advises that a recession does come with new opportunities for people such as investment or career goals and skills.
He points to new remote jobs now more available to people as a way of trying to increase their savings, though he does say this is not ideal for everyone.
Andriu adds that although it seems scary, recessions do have a window and will eventually pass.
He adds: “It's kind of a matter of holding tight for the remainder of it and hopefully coming out the other side not too scathed.”
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