Only the most charmed souls make it through life without facing some sort of personal or economic upheaval. But you can take action today to prepare and safeguard your finances from any chaos that may arise. Learn how to keep your cool (and your cash!) in the midst of crisis.
Tips for handling your finances during a crisis
Craft your own definition for financial security and try not to compare yourself to others. Recognize that everyone has crises and problems to navigate, both personal and in the broader economy. It’s important to understand the opportunities that arise during the inevitable economic downturns and setbacks. Check out these tips for keeping calm when a crisis hits:
- Take stock of your resources.
- Make note of safety net programs at the federal, state, and local levels. They may be of assistance.
- Be careful as you consume news and opinions on various media platforms.
- Carry essential catastrophic insurance to help protect against unexpectedly large expenses, such as medical bills, and to protect against liability claims in accidents and other claims.
- Find insurance to protect your future income for yourself and for loved ones.
- Maintain patience and fortitude to recover from a crisis. You may also seek expert help.
- Learn how to better navigate future economic problems by studying past economic crises and what happened and why.
- None of us know what the future will bring. To be best prepared, you should anticipate the unexpected and position yourself financially for any future surprises.
Balance financial safety in today's economic world
Capitalism is the best economic system for producing long-term economic growth, enabling people to earn money, and be rewarded for providing things that others value and build wealth. Here are some points to keep you on track:
- Be careful not to pay too close attention to the myriad economic reports that are continually released. Some are far more important than others, but most are confusing at best and are best examined over extended periods of time.
- Be sure to balance what you hear. Experts and pundits are everywhere, especially online and in the media. Find out how and why they get the spotlight and which ones are worth listening to. And be sure to discern what each one is really selling.
- Stay informed with what the economy is doing. The financial markets, and especially the stock market, are constantly changing and captivating if not confusing to follow. Understand what moves the markets and stay informed without getting overwhelmed or being undermined by your biases.
- Be sure to live within your means. It’s central to sound personal financial management and provides the foundation for regularly saving money. In addition to strategies to limit your spending, you should be sure to keep a budget.
- Invest wisely to build wealth and your long-term financial security. You should choose investment vehicles that best fit your personal profile and which you will be more likely to stick with during good times and bad. Downturns provide excellent opportunities to buy sound investments at attractive prices.
- Don’t be too good at saving and building wealth (this may sound surprising!). You can actually “over save” and be too rigid about a never-ending quest for more. You should enjoy and make use of your money and be careful to not continually seek greater balances.
