How a Recession Can Be Good for Your Finances – If You’re Prepared
When you hear the word recession, your first thought probably isn’t “opportunity.” And understandably so—economic slowdowns come with layoffs, market dips, and a whole lot of anxiety. But for law firm partners and self-employed lawyers with a strong financial foundation, recessions can create powerful moments to regroup, refocus, and even build wealth.
It all depends on how prepared you are.
Let’s break down how a downturn could actually move your financial goals forward—if you’re ready for it.
1. Investing While Everyone Else is Panicking
If you're contributing to a retirement plan like a Solo 401(k), SEP IRA, or brokerage account, a market dip might be a gift in disguise. Stocks and index funds are essentially “on sale” during recessions—which means your dollars go further.
If you’ve built up a cash cushion, this is your moment to keep contributing—or even increase your contributions.
2. Forced Clarity = Smarter Spending
Recessions often make people reevaluate everything—business expenses, personal budgets, even big life goals. That can be a good thing. Are your firm’s overhead costs bloated? Is your family budget aligned with what actually matters?
Slowdowns prompt tough but healthy questions. With the right perspective, this kind of reset can lead to better long-term decisions.
3. Downturns Can Spark Smart Moves
When everything feels uncertain, people tend to take action they’ve been putting off—like setting up a retirement plan, making estimated tax payments on time, or finally working with a financial planner.
We see it all the time: fear creates urgency, and urgency creates movement. You might look back and realize that 2025 was the year you got serious about financial structure—and never looked back.
4. It’s a Prime Time for Hiring and Expansion
If you own your own firm or business, a recession might bring new opportunities. Talent is more available. Vendors are more flexible. And competitors might be scaling back. With a strong plan in place, you might be able to grow when others are shrinking.
5. Tax Planning Is More Important Than Ever
Recessions often come with income volatility. That makes tax strategy essential. Can you shift income or expenses across tax years? Are you optimizing retirement contributions? Are there losses to harvest?
Smart tax planning during a down year can have ripple effects for years to come—and put you in a better position when the market rebounds.
So... Is a Recession “Good”?
No one’s cheering for an economic downturn—but with the right tools and mindset, it doesn’t have to derail your goals. In fact, it might push you to create the kind of financial plan that keeps you steady in any market.
If you're ready to recession-proof your finances—or use a downturn as a launchpad—let’s talk. There’s still time to make 2025 a year of smart growth, not survival mode.
