Recession-Proof Your Finances!
Many experts believed we were entering a recession back in February, and two weeks ago, the National Bureau of Economic Research declared it official. Some say the recession will come to an end with the re-opening of most state economies but given the amount of uncertainty of what comes ahead, we can’t be sure. Instead of panicking and holding onto every dollar, consider some of these tips to help ease the financial burden of a recession.
- Pay down debt
Eliminate as much debt as possible to ease your financial burden. The less you owe, the more you’re able to keep in your pocket. Consider the snowball strategy: start with high-interest debt such as credit cards, focus extra money on paying that off, and then move onto the next highest interest debt until you’ve paid off all your debt. Debt consolidators can give you unique tips on reducing amounts accumulated. Aim to maintain a low or zero balance on all your credit cards at the end of each month. Decreasing your debt can protect your finances—you’ll have less obligations and a larger budget to save.
- Assess your portfolio quarterly
Depending on your risk tolerance and comfort level, this can be a quick phone call or a detailed conversation with your financial advisor. Staying informed about your finances can help keep you on track to your goals and potentially allow for new investment opportunities. Consider asking for account summaries to understand the numbers or seeking a second opinion.
- Increase your emergency fund
Who wouldn’t want a cushion for tough times? Save as if you’ll need it but spend it as if it doesn’t exist. This means saving as much as possible and not dipping into the funds unless it’s a true emergency. This is especially important for families or business owners as you’ll have more financial obligations. If you’re just starting, create a realistic weekly or monthly contribution amount and stick to it. Many experts recommend having at least 6 months of expenses saved.
- Reduce Expenses
Though many of us have been spending less since the start of the COVID Pandemic, most states are re-opening, which means many people will spend more. Consider what you’ve been without for the past few months and try going a bit longer. You may find that your monthly hair appointment can be pushed out a few more weeks or maybe you enjoy exercising outside of the gym. Small reductions add up too. Now that it’s summer, maybe you’ll be inside less and won’t need as many subscriptions.
- Discuss Your Concerns
The right strategy can transform your finances and help you live your ideal retirement. Though much of America is re-opening, the economy is still fragile. This calls for a new type of “normal” for retirement planning and financial strategizing. No retiree is the same and no effective plan is the same either. At RGA, this is why we custom tailor financial and retirement strategies to best meet the individual’s concerns, whether that be guaranteed income, tax reduction, or wealth management, just to name a few.
It’s difficult to fully prepare for a recession, but not impossible. With the proper plan catered to your lifestyle, goals, and risk tolerance, you should feel confident and understand how your money is working for you. To learn what that may look like or for a free evaluation of your current plan, click the link below, call 1-800-467-8152, or email firstname.lastname@example.org.
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