Life has its share of ups and downs—and that includes economic downturns that can strain your savings, shake your confidence, and derail your best-laid plans. Yet, as with many things in life, tough times provide the opportunity to learn valuable lessons.
Below, people from their 30s to their late 60s share the financial and professional insights gleaned from weathering past economic storms.
Morgan Whittinghill, 30, New York City, New York
Morgan Whittinghill was working at a nonprofit when the pandemic hit and sent the economy into a tailspin. With so much instability in the world—and her monthly rent eating up nearly half of her income—Whittinghill doubled down on saving by cooking meals at home, growing her own vegetables, and engaging in free and low-cost activities.
“I was surprised by how little I could live on,” she says.
Although her income was modest, when Whittinghill received a small inheritance from her grandfather, she didn’t spend the money. Instead, she opened an investment account, determined not to let the money “just sit when it could be growing.” Today, as she balances her day job with her art and music performances, she remains a resourceful saver.
Recession lessons:
- With a little ingenuity and effort, you can stretch limited resources and prioritize essentials.
- Investing early in life gives money time to potentially compound, helping to build a more secure financial future. Over time, even a small investment can grow enough to make a big difference.
Jessica Randhawa, 39, El Dorado Hills, California
Jessica Randhawa, who graduated during the bleak 2010 job market and still-recovering housing market, says, “the Great Recession became my real-world money teacher.” After the downturn from late 2007 into mid-2009 (also called the 2008 global financial crisis), and through the long recovery afterward, she zeroed in on what was within her power: bolstering her credit score. Today, 15 years later, her score is excellent, and nearly 250 points higher than it was during the Great Recession, which gave her a significant advantage in purchasing her main home and a beloved beach house.
Then, with the COVID-19 pullback, her cooking and recipe business, The Forked Spoon, was “hard hit when advertising revenue plummeted,” she says. From that experience, she learned the importance of having a well-funded emergency savings account to help cover expenses if your income takes a hit. She also realized that it’s helpful to diversify income sources whenever possible and to automate investing so that emotions wouldn’t drive her decisions. When the next downturn occurs, Randhawa says she’ll be “in a strong financial position and will make informed decisions rather than panicking.”
Recession lessons:
- When the world around you feels uncertain, focus on financial factors you can control.
- It can take time to recover from a downturn and a financial setback. But it can be an opportunity to build strong financial habits that can set you up for success later.
- Strengthen your safety net by having a well-funded emergency savings account, automating investment contributions, and, if possible, additional sources of income.
Jason Allen, 40, Cleveland, Ohio
When Jason Allen graduated during the 2008 financial crisis, he watched as friends got laid off, moved back in with their parents, and took any work they could find, even if it wasn’t related to their degree. Eventually, he, too, moved home and took a job at a local retail store to weather the downturn. “There was a prevailing sense of uncertainty,” he says.
Moving back home can be humbling—and parental safety nets aren’t always guaranteed. Even when family support is available early in adulthood, parents’ financial and health circumstances can shift dramatically over time, making it important to build your own buffer once you're able.
For Allen, that period drove home the importance of planning ahead for bumpy times. Now a software developer, he routes a portion of his salary automatically into savings. “I pay myself first,” he says. “I treat my savings account as a bill that needs to be paid.”
That simple practice has served him well. “It allowed me to save a lot of money over the years to absorb unexpected shocks,” he says.
Recession lessons:
- Support from family or friends can provide stability when you need it—but it’s not a substitute for building your own financial resilience. Situations change, and having your own safety net offers flexibility and independence.
- Prioritizing emergency savings, developing versatile skills, and forming a strong professional network can help young workers protect themselves from future shocks.
Jessica Varian Carroll, 46, Neptune, New Jersey
Jessica Varian Carroll and her then-husband bought a home in 2003, stretching their budget to cover the monthly mortgage payment. When they sold that house and purchased a new one in 2006, lenient lenders approved them for a mortgage with a monthly payment of more than double the previous mortgage bill, an amount that quickly overwhelmed them. Then, like many homeowners during the global financial crisis, they lost the property to foreclosure, and ultimately, the financial strain took a toll on their marriage.
Looking back, Carroll is clear about what went wrong: They based their purchase on what the lender said, not what they could afford. “Even if you’re approved, it’s important to think it through,” she says.
Recession lessons:
- Don’t equate loan approval with affordability. Run the numbers to determine what fits your budget and take the worst-case scenario into account when planning.
- Be aware of the risks you may be taking—whether it’s investment-related or part of your personal finances. Don’t let the promise of potential rewards overshadow an honest investigation into what could go wrong.
Ed Gandia, 54, Woodstock, Georgia
Business was booming after Ed Gandia launched a copywriting firm in 2006. So when early talk about a recession surfaced, he wasn’t concerned. Yet, by the summer of 2008, he lost his biggest client, and as other customers cut budgets, they departed too. As the sole family earner with a young child and no income, his savings were quickly depleting.
“It felt like there was no end in sight,” he says. “It’s one of the hardest things I’ve ever been through.”
Nearly a year into the downturn, a marketing coordinator he had met only twice unexpectedly connected him with a new client. From there, Gandia was able to rebuild, with that new client becoming his biggest ever. He says he learned this powerful lesson: Even when life is busy, it’s critical to nurture your professional networks. A quick text or email, sent regularly in good times and bad, lets them know you’re thinking of them. “That steady touchpoint helps people remember you when opportunities surface,” he says.
Recession lessons:
- Treat professional relationships like long-term investments. Consistent networking and staying in touch can bring new clients and job leads.
Diane Faulkner, 61, Jacksonville, Florida
Diane Faulkner launched her HR consulting business amid an early-2000s economic crash when overvalued internet companies (known then as “dot coms”) collapsed. Businesses across the board were slashing budgets, cutting training, and failing to update their HR handbooks. To land clients, she had to project confidence and clearly articulate her value. During meetings, Faulkner explained how her work could protect businesses and prevent costly mistakes. “That’s how I got my foothold with some local companies,” she says.
She adds that knowing—and demonstrating—your value is just as critical for employees as it is for entrepreneurs. Being able to clearly state what you bring to the table can bring promotions and may even protect you when companies are deciding who to lay off.
Recession lessons:
- You don’t need to boast, but demonstrating your worth can bring in new clients, help you survive layoffs, and position you for advancement.
Michael Gavaghen, 68, Boca Raton, Florida
Michael Gavaghen, a vice president at an IT firm, has worked in technology since 1992, providing him with a unique perspective on the dot-com boom and bust. Around him, people were investing in tech-based companies under the premise that “the internet was going to change the world.” There wasn’t enough consideration of business fundamentals or the realization that tech transformation can take years, even decades, he adds.
Gavaghen got briefly swept up, too, buying a soaring stock that plummeted in the downturn. Rattled by his losses, he sold, then missed out as the share price recovered. In hindsight, “a more patient investor would’ve held on,” he says.
He’s since avoided hype and stays focused on his goals. As he approaches retirement, his portfolio is diversified and intentionally conservative, as he aims for steady growth rather than the next big thing.
Read Fidelity Viewpoints: 6 tips to navigate volatile markets
Recession lessons:
- Do your due diligence and keep the long game in mind. Just because an investment or industry is generating buzz, it doesn’t mean it’s the right fit for you or your financial goals.
- A downturn can stir up fear. Before you make any major financial moves, take a pause and make sure panic isn’t driving your decisions.