My Recession Investing Plan

Halloween (and October) is a great time to re-access our spending. It’s good to have a crystal clear picture of our finances going into the New Year.

I recently moved from Japan to San Diego, which means that my budget, spending, and saving habits had to change.

The impending recession and bear (stock) market add more heat to the fire. I will have to include the economy in my thinking moving forward. So, let’s look at how I will allocate my money until next summer.

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Overview of my Recession Investing Program. Let’s take a quick overview of my RIP. Here are the areas I want to focus on for the next 8-12 months.

1. Checkings ($500/month)
2. High Yield Savings ($800/month)
3. Series “I” Bonds ($100/month plus royalties)
4. 30-Year Treasury Bonds ($200/month)
5. Dividend Growth Investing ($800/month)
6. Income Investing ($600/month)
7. Dividend Debit Card ($500/month)
8. Recession Budget (-$1,500/month)

Checking accounts to save the day. I am making a concerted effort to keep more money in my checking account. I aim to save at least $1,000 in five separate checking accounts. 

I am currently at $1,000 in three of my checking accounts. These accounts are my first line of defense from random things that seem to pop up.

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High Yield Savings Account. My Discover HYSA is paying 2.2% interest at the moment. Last month, I had to spend $3,000 out of my HYSA to cover an expense at my Arizona home.

My goal is to have $10,000 in my HYSA by the end of 2023. HYSAs are my protection against unknown emergencies. Once I get to $10,000, I want to build out my home maintenance funds.

Series “I” Bonds. “I” Bonds are one of my favorite investments at the moment. Right now, I have an automatic withdrawal from my checking to Treasury Direct for $100/month.

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The good thing about Series “I” Bonds is that you can buy them anytime. I am earning more money from book royalties, so I plan to buy more “I” bonds with those funds. 

30-Year Treasury Bonds. Bonds are back in style, and I couldn’t wait for my 30-Year Bonds to get to 4%. 30-Year Bonds sit at around 3.8%, which is good enough to start buying.

30-Year bonds are tricky to buy because they go at auction. Therefore, I automatically buy $200/month in C of I funds.

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C of I stands for Certificate of Indebtedness funds. These are basically like a zero-interest checking account inside of Treasury Direct. 

I buy $200 in C of I funds on the 1st of every month. Then a couple of days after those funds hit, I set up my purchase at the bond auction. 

30-Year bonds are usually auctioned around the 15th of the month. Also, if I set up a $200 bond, it may cost more or less. 

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It may cost $202 if the auction is competitive to get these bonds, or it may cost $197 if there isn’t much excitement. Therefore, you want more than $200 in your C of I account. I usually keep an extra $20 to $30 in there to guard against randomness.

I see that I need to write an article about buying 30-Year bonds and how to document the interest payments—it’s a whole thing.

The fruits of the DGI trees. I still dollar-cost average into my dividend growth portfolio via STASH. I have notable companies like Mcdonald’s (MCD), Altria (MO), Phillip Morris (PM), and Proctor Gamble (PG).

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I also have five custodial accounts where I purchase index funds for future generations. Stocks are taking a beating, and I keep investing for the long term. 

I love income investing. My primary income investing portfolio resides in M1 Finance—it’s my favorite part of investing.

However, because of the recession, I need to focus more on the savings arm of my portfolio. I still put $600/month into high-yield closed-end funds and blue-chip stocks. 

Dividends to help increase my budget. I love getting dividends on my dividend debit card via Cash App. However, if I want my dividends to keep growing, I must feed the beast. 

I put $500/month into my high-yield stocks on the Cash App. This number ensures that my dividends keep increasing with inflation raging.

Finally, my recession budget. In Japan, I could live off of $600/month. I need a whopping $1,500/month here in San Diego to survive, not including my $800 payment for my room rental. 

However, I think I can keep my spending under $1,500. That would allow me to invest the remaining cash into Series “I” Bonds or preferred shares. 

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What is your recession investing plan? You need a plan. My plan is heavy into building my checking and high-yield savings accounts.

Trust me; I prefer to put all that savings into high-yield investments. However, now is the time for patience and preparation.

We do not know how deep this recession will cut. How many layoffs will occur? How will the rental markets, evictions, and student loans factor into the equation? 

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Conclusion. This article was a brief look at how I structure my Recession Investing Program. I take my money seriously—this ensures it keeps growing. 

Halloween is a time for trick-or-treating and having fun with the family. We must save and invest if we want to have even more fun next year and the following year. 

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If you think this recession is a joke, more power to you. I am taking this new economy as the new normal. If you don’t have 3-5 streams of income, you will fall behind.

And when you do receive the cash flow, you must account for every penny. Every dollar needs a purpose (budget, savings, investing). 

I know it sounds boring, but it is fun to watch your money grow. It may take a shift in perspective, but if you are reading this, you are on the right track. Good Luck!

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Disclosure: I am not a financial advisor or money manager, and any knowledge is given as guidance and not direct actionable investment advice. I am an Amazon Affiliate. Please research any investment vehicles that are being considered. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it.  I have no business relationship with any company whose stock is mentioned in this article. All Right Reserved Military Family Investing