Getting It Together In Case Everything Falls Apart
The news for the past couple of months have threatened lots of things recently including hurricanes, nuclear war, and the ever present drum beat to a possible full on recession. The talking heads on both sides of the isle are giving their best and worst case scenarios but what are we to do as normal citizens who depend on businesses being open and our retirement money safe?
I don’t think we are heading into the nuclear war era, and Florida can now put the most recent hurricane in the rear view mirror (or at least they will on the news but cleanup will likely last for quite a bit longer). What I wanted to touch on today was what you can do for yourself or your family to better prepare for a true market recession.
Not everyone should follow the same plan for work, saving, investing, or even planning but I think most will agree the points below are important to most.
The first point I would like to emphasize is that saving money is great for any season. Taking control of how your money leaves your bank account is just as important as how it found it’s way in there in the first place. Every quarter I look at my financial statements and try to find any “services” such Netflix or Pandora, etc.. that I may have wanted in the past but as life gets pulled in many different directions, unsubscribing from some of those services may be a good choice going forward. Most of these subscriptions will let you hop back on if you change your mind but they will not reimburse you if you stay subscribed but don’t actually use the service.
The second point I would check is to make sure you or your family have some type of financial emergency fund. If you don’t currently have an emergency fund I would work to get one started. Normally an emergency fund should have enough saved to be able to keep you afloat for 3–6 months. More is always better but not always practical for most people. If you don’t have one I would start one today as it will be better with a start today then years from now. Take advantage of the fact that you are thinking about this and get it done. Remember that companies feel financial pressure as well and if they can save money by cutting you loose most will not have a second thought about pushing you into financial uncertainty even amidst a recession (or pandemic).
Finally make sure that you have a good grasp of where your money is and what can have an effect on it. If you are an active stock trader now is more a time to keep a healthy cash and bond balance then have a majority in stocks. However, if you keep your money invested in a fund or a third party just make sure it makes sense where it is. Overall the stock market is a great investment so don’t make changes to your portfolio based on fear (which can be just as bad as greed to your bottom line). Changing (or possibly changing) market conditions are just another time for you to make sure your risk tolerance is in sync with your goals.
