Vivian Tu’s 5 Money Saving Hacks for a Recession
Written by
Laura Beck
Edited by
Brendan McGinley
Commitment to Our Readers
GOBankingRates' editorial team is committed to bringing you unbiased reviews and information. We use data-driven methodologies to evaluate financial products and services - our reviews and ratings are not influenced by advertisers. You can read more about our editorial guidelines and our products and services review methodology.
20 Years
Helping You Live Richer
Reviewed
by Experts
Trusted by
Millions of Readers
Vivian Tu, the former Wall Street trader turned personal finance creator behind Your Rich BFF, has built a massive following by making money advice actually useful. When economic downturns hit, her strategies for her audience shift from wealth-building mode to recession survival.
Here are the five money moves Tu recommends when the economy gets shaky.
1. Build a Bigger Emergency Fund
Tu’s standard advice is keeping three to six months of expenses saved for emergencies. But when recession talks start, she changes that target dramatically.
In an interview with Business Insider, Tu said people should aim for six to nine months of expenses during tough economic times. Her reasoning is simple: Job loss, pay cuts and longer hiring cycles become more common when the economy tanks.
She also explained on the Marie Claire Nice Talk podcast that “you’d need a bigger safety net” during recessions because standard emergency funds assume normal economic conditions. Recessions aren’t normal.
The extra cushion gives breathing room to be selective about new jobs rather than taking the first offer out of desperation. It also reduces the panic that leads to bad financial decisions when money gets tight.
2. Attack High-Interest and Variable Debt First
Credit card debt and adjustable-rate loans become financial killers during recessions. When interest rates rise, variable debt payments balloon fast.
Tu told Business Insider that paying off high-interest debt should be a priority in recessions to avoid getting squeezed by rising costs. Her logic is straightforward: Every dollar lost to interest is a dollar you can’t use for necessities or building wealth.
She recommended tackling credit cards and variable-rate loans before worrying about low-interest fixed debt like mortgages or federal student loans. Those stable payments won’t suddenly spike and wreck your budget.
Freeing up cash flow by eliminating high-interest payments gives budgeters flexibility when income becomes uncertain. It’s defensive financial positioning.
3. Be Smart About Cutting Spending, Not Drastic
Tu pushes back against the “cut everything” approach most recession advice promotes. Blanket austerity makes people miserable and usually fails.
In Business Insider, she talked about making discerning cuts rather than eliminating all discretionary spending. Skip food delivery and DIY your nails, but still budget for things you genuinely care about. The key is cutting convenience costs that don’t add real value to your life.
In an essay in Wondermind, Tu focused her advice on value-based spending: Think about purchases in terms of hours worked. If something costs $100 and you make $25 per hour after taxes, that’s four hours of work. Is it worth four hours of your life?
This framework helps separate worthwhile expenses from wasteful ones without making you feel deprived. Sustainable spending cuts beat temporary deprivation that leads to rebound overspending.
4. Keep Investing Steadily Through Dollar-Cost Averaging
Trying to time the market bottom is where most people screw up during recessions. They either panic sell at the worst moment or wait forever for the “perfect” entry point that never comes.
Tu warned Business Insider readers against investing lump sums while trying to call the bottom. Instead, she advocated dollar-cost averaging through downturns — investing the same amount regularly regardless of market conditions.
This strategy smooths out volatility and removes emotional decision-making from investing. You buy more shares when prices are low and fewer when prices are high, averaging out to a decent cost basis over time.
The hardest part is maintaining discipline when headlines scream about market crashes. But that’s exactly when consistent investing pays off long-term.
5. Increase Your Income Instead of Just Cutting
Cutting expenses only goes so far. Eventually you hit a floor where there’s nothing left to trim. Income growth, however, has no ceiling.
Tu strongly emphasized salary negotiation and side hustles on the Caroline Chambers podcast. During recessions, the instinct is to hunker down and not rock the boat at work. Tu said that’s backwards. You need more income cushion precisely when jobs feel uncertain.
For this reason, side hustles become especially valuable during recessions because they diversify income sources. If your main job disappears, having $500 to $1,000 monthly from freelancing or consulting softens the blow.
She’s also shared quick tips on her Instagram about curbing spending while boosting income. The dual approach works better than either strategy alone.
More From GOBankingRates
