As the U.S. economy shrinks for a second straight quarter — one definition of a recession — many Americans aren't prepared for an economic downturn.
However, financial advisors say there's plenty that is in your control.
Fewer than half of Americans feel "financially secure enough" for another recession, according to a survey from digital wealth manager Personal Capital.
Among those surveyed, the top fears include the inability to plan for the future, trouble paying bills or losing a job, the report found, polling roughly 1,000 cross-generation Americans in May 2022.
More from Personal Finance:
How investor portfolios are shifting as the Fed hikes rates
Gaps in access to paid leave lead to financial hardships
What the Fed's interest rate hikes mean for you
However, the average emergency savings is roughly $7,600, according to the survey, which may be lower than needed. While advisors typically recommend three to six months of living expenses, other experts may suggest more for added flexibility.
What advisors are telling their clients
While some indicators point to a recession, other factors, such as the jobs market, say otherwise. But Americans won't know until it's decided by the National Bureau of Economic Research, the official documenter of economic cycles.
Federal Reserve Chairman Jerome Powell on Wednesday said he believes the central bank's rate increases will tame inflation and does not see a recession.
"I've seen the soap opera unfold on whether or not we're in a recession," said certified financial planner Charles Sachs, chief investment officer at Kaufman Rossin Wealth in Miami. "The focus is how does that impact you?"
If you haven't evolved and you don't have a skill set in demand, then irrespective of what's going on in the economy, you could be in your own personal recession.Charles SachsChief investment officer at Kaufman Rossin Wealth
Since no one can predict when a recession may happen, it's best to focus on what's in your control, such as how much you're spending and saving, he said.
"If we're looking at your personal balance sheet, and like many people, you're living above your means, that's arguably not sustainable," Sachs said.
And recession or not, job loss can happen at any time.
"If you haven't evolved and you don't have a skill set in demand, then irrespective of what's going on in the economy, you could be in your own personal recession," Sachs added.
How to handle stock market volatility
Growing recession concerns have only compounded as investors grapple with soaring inflation, rising interest rates and ongoing stock market volatility, experts say.
"People are being very short-term defensive, regardless of what their long-term goals are," said Bill Parrott, a CFP, president and CEO of Parrott Wealth Management in Austin, Texas.
While some have lingering fears from the financial crisis in 2008, emotion-based money moves, such as impulsively selling off assets, may miss future gains and put their plan at risk, he said.
Indeed, the market's 10 best days over the past 20 years happened after some of the worst, including during the downturn in 2008, a recent J.P. Morgan Asset Management analysis found.
When Parrott's firm receives a panicked phone call, it revisits the client's financial plan to review how stock market volatility may affect their goals.
"I know every advisor probably says 'stay in the market,' but we back it up with their financial plan and show them the data," he added.