Making Money Personal

Tips to Protect Wealth During Economic Challenges - Money Tip Tuesday

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Recession, crisis, tariffs, inflation—all these words circulating around the media and internet for the past few weeks have made many people uneasy and a little frightened about the future. Stories of an alarming nature are circulating daily, so if you're beginning to feel spooked, you're not alone.

Whether or not a real economic crisis will happen is hard to predict, but setting some safeguards for your financial future can give you some solid peace during turbulent times.  

Links:

  • Set aside cash in a savings account for potential emergencies
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    • Transcript: 

    Welcome to Money Tip Tuesday from the Making Money Personal podcast.  

    If you've been following the news lately, you're likely hearing alarming messages warning of a looming recession, empty store shelves, economic uncertainty, and the possibility of a global financial crisis.   

    Many of our brains are wondering how likely we are to experience these challenges and, if so, when.   

    First and foremost, it's crucial to stay calm. Remember, news stories are often sensationalized for attention-grabbing headlines, with little substance behind them.  

    This doesn't mean that there might not be some financial challenges coming down the pike, but the good news is that, we can take specific, measurable steps to safeguard our finances for the possibility that something might occur.  

    If you're feeling uneasy about your financial future, here are a few ways to safeguard your finances during economic challenges and even recessions.   

    1. Save money. If economic uncertainty increases, the chances of job loss, price increases, and unplanned expenses go up. Having money set aside for those purposes is not just wise, it's a crucial step towards feeling secure and prepared. Having money saved in an emergency fund can also keep you from relying on credit or dipping into retirement if you need money. It's wise to have some saved in an account you can easily withdraw from, and to even have a portion of it as cash at home in case there are tech disruptions, or you don't have the time to get to a bank or ATM. 

    2. Work to pay down excessive debt. When it comes to economic uncertainty, crippling debt can be a liability. Many Americans carry a variety of debts, but if your debt has become burdensome to the point that it's causing stress, you owe it to yourself to do something about it. Those carrying crippling debt don’t have the freedom to adapt which proves so valuable during economically challenging times. To safeguard your financial health against economic challenges, it's important to start paying down your debt. Focus on an effective debt-reduction plan like the debt snowball or debt avalanche method. If you’re unsure where to start, check out our debt reduction webinar on our YouTube channel for a practical and easy-to-follow debt-reduction strategy.  Don’t panic and feel that you have to be fully debt-free to weather an economic storm. Instead, focus on minimizing your debt to free up more income for your needs as they arise. 

    3. Review existing investment portfolios. If you're worried about future economic challenges, it's a good time to look at your current portfolio. The point of this isn’t to panic, but to determine whether it’s time to make strategic moves in the market. Doing this can provide reassurance and a stronger sense of control. Economic factors impact investment and retirement accounts, so at times situations may arise to make adjustments. For those unfamiliar with investing and markets, it's ideal to sit down with a professional who can review everything and provide a custom assessment regarding your portfolio. Financial planners with investing experience can be excellent guides because they've been watching markets, can see trends, and have a comprehensive understanding of the various factors at play within the economy. If you're interested, Triangle's financial planning services offer expert advice on making the right investment moves in a volatile market. Visit trianglecu.org to explore resources for investing and preparing for the future.
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    4. Cut back on expenses and practice frugality. When times get lean, making the most of what you have, and cutting back on spending can give you an advantage. Practicing this gives you control over your money and lifestyle in a way that can shield you against the many unexpected possibilities like unemployment and rising prices. Unemployment isn't always a result of challenging economic times, but if history is any teacher, the likelihood of layoffs increases. Positioning your finances to shield yourself against a potential job loss is essential. Along with having an emergency fund and working to pay down debt, mentioned earlier, it may be worthwhile trying to cut back on unnecessary expenses. Use more of what you have, cut back on purchasing things you don't need, and get creative by substituting the purchase of expensive items and activities with more inexpensive ones.  

    5. Look for ways to build skills to help with everyday life. Sometimes, with some vision and creativity, you can turn a misfortune into an opportunity. Building new skills may be able to help relieve the economic burden. This may be the time to learn skills that can assist with providing for daily needs. Activities like gardening when done effectively, can help reduce food costs, and skills like clothes making or mending can make your current clothes last longer plus cut down on the need to purchase new ones. You can also explore other skills like simple car repairs, simple plumbing, home repair, wood working, construction and more. Building skills in these areas could open doors for opportunities to help yourself and others in a time of need. Explore some resources like DIY books, YouTube channels, or online groups to get instructions and advice from experienced people covering all kinds of projects. Plus, becoming proficient in new skills can also open doors to potential future income streams that would help supplement your existing income.  

      6. In times of financial uncertainty, taking proactive steps to secure your financial situation can provide a sense of control and stability. By saving money, reducing debt, and reassessing investments, you can better prepare for potential challenges ahead. Remember, staying informed and making thoughtful decisions now can lead to a more secure financial future, no matter what comes your way. 

      If there are any other tips or topics you would like us to cover, let us know at [email protected]. Like and follow our Making Money Personal FB and IG page and look for our sponsor, Triangle Credit Union on social media to share your thoughts.  

      Thanks for listening to today’s Money Tip Tuesday and check out our other tips and episodes on the Making Money Personal podcast.  

      Have a great day! 

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