Economic crises are inevitable. Learn the pre-crisis financial position that makes crises survivable, what to do immediately when one starts, and how to invest during market downturns.
Major economic disruptions — recessions, banking crises, pandemics, currency crises — happen regularly. The 2008 financial crisis, the 2020 COVID recession, inflation surges, and regional currency crises affect freelancers severely when unprepared and are manageable when prepared.
You cannot prepare for a crisis that has already started. Preparation happens during good times:
Large emergency fund (9-12 months): Double the standard recommendation during uncertain periods.
Diversified income: Multiple clients across different industries and geographies.
Low fixed obligations: Low rent (or paid-off home), no high-interest debt, minimal mandatory monthly payments.
Stable currency savings: For those in volatile currency environments, savings in USD or EUR provide protection against local currency crises.
Immediate actions:
- Pause all non-essential spending immediately
- Do not make major investment or purchase decisions for 30 days (let the picture clarify)
- Contact clients proactively to assess relationship stability
- Identify which of your services are most valuable during a downturn
Medium-term actions:
- Identify counter-cyclical services you could offer
- Cut subscriptions and overhead aggressively
- Explore additional income sources before you need them
If you have stable income and an emergency fund: continue investing. Market downturns are the best time to buy more shares of index funds at lower prices. The worst financial decision is selling during a crisis.
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