The theme this week on the Retirement Quick Tips Podcast is: Inflation Is Still Getting Worse! What To Do Now

Today, I’m talking about dropping all unnecessary expenses. Not the most fun topic to discuss and much easier said than done, but if a recession is coming, financial stress and potential job losses are in store, especially if you work in a highly cyclical industry that tends to get hit hardest by recessions, expect news of layoffs, furloughs, and pay freezes or pay cuts. 

Couple that with the current high rate of inflation, and many Americans will be blindsided by how quickly their financial situation deteriorates if a recession hits. Inflation will likely abate during a recession, but there will definitely be an overlap of continued high inflation and a recession, which is especially painful. 

So the goal then is to create breathing room with your finances. And that means that increasing your savings now will be of utmost importance. You don’t want to be caught in a situation where you’re forced to take on credit card debt because you don’t have enough cash savings to get you through a job loss or a financial hardship that could last a few months. So start now. Drop all unnecessary expenses. Planning to remodel your bathroom? Want to get a new car but don’t need one? Wait. Downsize the summer vacation. If you’re like me, you’ve been itching to travel more since being stuck at home during the pandemic. But instead of the 2 week vacation to Hawaii or the Caribbean, save the cash and take a trip to the lake or beach instead for a few days.

It’s especially important to avoid any expenses that will add to your fixed monthly costs. Which goes back to the new car or the bathroom remodel. Even if you have the cash, hang on to it, and if you don’t have the cash and will be using debt to finance these larger purchases, the last thing you want with a recession on the horizon is a new fixed bill added to your monthly expenses. 

That’s it for today. Thanks for listening! My name is Ashley Micciche and this is the Retirement Quick Tips podcast. 

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Tags: retirement, investing, money, finance, financial planning, retirement planning, saving money, personal finance