The rise and fall of the market, increasing inflation rates, and unpredictable economic changes can leave anyone feeling completely off balance. When so much feels out of our control, controlling what we can may bring some stability.
What does it mean to be financially stable? You’ll likely see many definitions, but some of the most important factors are having a balanced budget, being able to cover your costs of living, and feeling confident that you can manage potential financial risks that may arise. Tracking your spending is valuable at any time in your life, but can be especially important during times of uncertainty. If you don’t keep track of your spending habits or follow a budget, now is a good time to start. Review your expenses and see if there are any areas you can cut, even temporarily, to free up some income.
Begin by creating a list of essential and non-essential expenses. Essential expenses are things like rent or mortgage, groceries, utilities, and credit card and loan payments. Non-essential expenses include cable and streaming services, memberships, and restaurants/food delivery. Rank each of the non-essential items by importance and see which ones at the bottom of your list you can either put on hold or eliminate.
If you’re currently developing your budget or already have one in place, use the information you gathered from your spending review to make any adjustments. During uncertain times, it can be hard to predict how the situation may affect your finances in the coming months, but by proactively trimming down your budget and pressing pause on excess spending, you can be better prepared for whatever is around the bend. It also allows you to put more money toward your emergency fund or savings account. Your budget is an important way to track your spending and saving habits and maintain your financial stability when costs go up or unexpected events occur.
When we’re in the middle of economic or financial uncertainty, it can be difficult not to panic and we may forget that there are steps we can take to help strengthen our financial future. Ask yourself, what can I do today to help improve the life of my future self? Can you put a little more towards savings? Can you cut something from your budget and put that money toward retirement? Even if a small amount can grow your balance over time.
Whether you’re decades away from retirement or have a few years to go, creating a financial plan for the next chapter is important. Adding a fixed index annuity (FIA), for example, to your retirement strategy can help grow your assets while protecting your money from market downturns. Plus, some FIAs provide guaranteed income throughout retirement, helping you overcome the risk of outliving your money when you’re retired.
One of the best ways to navigate financial uncertainty and lower stress when things feel unstable is to boost your financial knowledge. You may choose to listen to money-focused podcasts, read financial articles or books, or find online resources that offer tips and guidance on improving your money management skills, lowering financial stress, and creating plans for the future. You may choose to read financial books or articles, listen to money-focused podcasts, or find online resources that offer tips and guidance. Sites like the Financial Literacy and Education Resource Center and the Consumer Financial Protection Bureau (CFPB) allow you to explore a wide variety of topics and improve your understanding of every facet of your financial life.
We could all use a little guidance and support throughout our financial lives, especially during economic uncertainty. Whether it’s the economy or your financial situation that’s off balance, seeking guidance can help lower your anxiety and devise a plan that gets you back on track. Meeting with a financial professional can help get your financial house in order by discussing ways to build your savings, maximize your budget, lower debt, and plan for the future. Being able to walk through financial scenarios and ask questions can often help you feel more in control and determine the most effective ways to move forward.
You can’t predict the future, but you can take steps to plan for it. Setting aside money for emergencies and sticking to your budget not only helps you be in a better position during periods of economic hardship but can allow you to explore more opportunities to build a stronger financial future.