By: Colleen Weber
Economic Outlook / News / News and Updates
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By Colleen Weber, CFP®, CPA
We’re almost halfway through 2020, and to say the year hasn’t gone as expected would be a massive understatement. Forget “uncertain times”—more like scary or downright panic-inducing. In the midst of unprecedented volatility regarding the markets and employment, it’s normal to experience a multitude of emotions, including uncertainty and fear.
Given the situation, it’s normal to worry. But the key is to worry about the right things.
As most of what’s happening in the world right now is beyond our control, let’s focus on what we can control—like our actions (and reactions).
Here are four actions within your control that will help you manage your finances in a crisis.
The first (and arguably most important) step is to stay calm. With all the scary emotions stirring, it’s easy to make rash decisions. But rash financial decisions almost always end in regret. Before making any big decisions, try to look at them objectively and weigh all the pros and cons—for both the short term and the long term. Better yet, speak with a financial advisor who can help you expand your view, see the big picture, and act appropriately.
Create A Crisis Budget
Desperate times call for desperate measures. Most of us are feeling some degree of financial pressure right now. It’s never a bad idea to revisit your budget and look for ways to cut back until hard times pass.
The idea of downsizing and living a more frugal lifestyle doesn’t sound fun, but you’d be amazed at how fast humans adjust to new circumstances. Give it a week or two, and your adjusted living conditions will start feeling like the new “normal.”
When it comes to investing, we all know not to put all our eggs in one basket. But this applies to income streams as well.
Relying on one source of income to stay afloat is risky business. To minimize this risk, look for side hustles you can do to bring in some extra money (bonus points if your idea is recession-proof and can be done from the safety of home).
Follow The Plan
Ideally, you’ll have a “crisis plan” established before calamity strikes. By having a plan in place (and understanding the logic behind it), you’ll be less likely to panic and make any costly financial mistakes. But if you currently find yourself without a plan (when you actually need one), don’t worry. The financial choices you make during a crisis can make or break your future wealth and security, so it’s never too late to put a plan in place.
If you’re unsure about how to handle your finances during these stressful times, it’s best to speak with a financial advisor. Our advisors at Colleen Weber CPA, CFP will show you how to weather an economic storm and teach you exactly how to defend yourself during a crisis. If you’re interested in setting up your own smart financial plan, book a free introductory meeting online! I look forward to hearing from you.
Colleen Weber is a fee-only financial advisor, CERTIFIED FINANCIAL PLANNER™ professional, and CPA with more than 15 years of financial planning experience. Providing comprehensive financial planning and wealth management, she specializes in serving clients nearing retirement, retirees, busy professionals, and women. She is passionate about developing financial plans that save clients on taxes, and investment strategies that help them pursue their goals. Learn more about Colleen by connecting with her on LinkedIn or booking a complimentary phone call meeting.