Living through a volatile economic period can be very stressful. While there are countless issues for families to be concerned with, there are still many very important financial-related matters that they can manage independently, regardless of economic c
Living through a volatile economic period can be very stressful. While there are countless issues for families to be concerned with, there are still many very important financial-related matters that they can manage independently, regardless of economic conditions.
Many people today are preoccupied with things they cannot control. It’s certainly natural to worry about such issues, but spending an inordinate amount of energy on worrying undoubtedly leads to high levels of stress. During challenging economic times, families are best served focusing their efforts on the things they can directly influence.
Savings and spending
Families can control the amount of money they save each month. Clearly, the more savings, the easier it will be to weather events that can’t be controlled such as job loss, inflation and other unforeseen emergencies. In challenging times, families should consider pulling back on unnecessary expenditures and increasing their savings rate. Spending goes hand-in-hand with savings. Simply, the less you spend, the more you save. For some, it may make sense to hold off on major expenses and to limit luxury spending, and a surplus of savings will bring peace of mind.
Investment strategy
Everyone has the power to decide where to put their money and the ability to develop an investment strategy that is in line with longterm goals. There’s no better time than right now to revisit how much you’re investing and where the funds are going. A qualified financial adviser can help you determine the best course of action based on your risk tolerance.
Planning for retirement
Saving for retirement remains important, regardless of economic conditions. And while dramatic swings in the markets will affect the balance of your 401(k), SEP and IRA plans, that shouldn’t change your contribution strategy. The sooner you begin contributing to these tax-advantaged plans, the more savings you’ll have down the road. While market conditions may limit the amount you’re able to contribute each month, remain in control of your retirement planning now so you don’t have to worry about it as you age.
Debt
We all maintain a degree of control of our debt, as well as our strategy for dealing with it. Now is not the time to incur additional debt, and if you have debt, now is the time to pay it off as quickly as possible. It will help to have the funds available for other expenditures and you’ll avoid any rate increases that might be lurking around the corner.
Credit
A strong credit score is critical for those seeking to obtain a loan at a favorable rate. Paying down debt, making bill payments in a timely fashion and removing incorrect information from credit reports can all help improve your score. If your family may be in need of a home or car loan in the not-too-distant future, take measures to improve your score before shopping for a loan.
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