This seems like a pertinent and relevant time to discuss ways to protect yourself financially in the anticipation of or during a recession. Keep in mind that personal finance is personal, and I am here to help you win with your money. As a money coach, I do not offer investments or insurances, I look at the patterns of behavior and your lifestyle to help you make minor shifts / tweaks to be able to see clearer into what your future could look like. Below are some ways that you can start seeing progress.
1) Start budgeting / tracking your money. With this simple, basic habit, you can begin to see traction in your daily life when you start to see the story your money is telling you. Budgeting gives you parameters of what you can allocate for saving and what you can allocate for spending. Every receipt you collect (or don’t ask for), as well as every credit card transaction / statement is a narrative of how you spend your money. What you spend your money on is directly tied to what you value. It takes about 90 days to get really good at budgeting. That is 3 months of hard work, understanding where your money is going and how you are now going to start telling it what to do.
2) Start Saving / Work Towards Building an Emergency Fund (here on noting as EF). Whether you choose 3 months or 6 months of expenses is up to you, but you should have enough expenses to cover your basic needs or your Four Walls such as food, shelter (which includes utilities), clothing and transportation. Almost 80% of Americans are living paycheck to paycheck regardless of income, so imagine how different your life will look when you feel protected against things like inflation or a recession. The EF is there for what my grandmother used to call a “rainy day.” You never know when it is going to rain (especially in California). Just like you never know if you are going to pop a tire on your way to work. If you make it a priority, saving up 3-6 months won’t take you very long.
3) Limit Impulse Purchases. Sure the end aisle at the grocery stores are enticing, but do you really NEED that candy bar, pack of gum, or soda? Don’t even get me started on the peanut butter cups at Trader Joe’s (so addicting – am I right?). Make sure you create a list when you are planning for meals during the upcoming week so you avoid “extra” purchases. It’s not just at the grocery store though. Amazon has made it really easy to purchase things online with a single click/tap. Target can be a budget buster if you don’t have a shopping list with you. Be mindful of what you spend your money on because all those little impulses can add up to a big bill in the long run. I would also advise not going to the grocery store when you are hungry. The impulse purchases tend to skyrocket when you haven’t had any food to satisfy your appetite. Going to the store with no prepared list and hungry is a recipe for disaster. Be prepared.
4) Don’t panic! The last thing you want to do is panic when your stocks, bonds, and 401(k) investments start looking like a red arrow bar chart pointing downwards each month to resemble more of a 101(k). The best part is, we have come out of it every time. Keep calm, ride the wave, and continue to invest. Make sure you consult with a financial advisor on the right blend of investment options in order to align with your goals.
Change is temporary, but can have a lasting effect. The choices you make now can impact your life three months from now. Call / text 805 407 6466 or email me if you want to change your family tree!