Brandon So, Staff Writer |
I’m sure everyone is aware that the stock market and economy ‘crash’ or ‘tank’. But due to recent global events and changing monetary policy, there is great uncertainty regarding the future of the stock market.
Recently, across the United States and the European Union, multiple banks have collapsed. Additionally, many central banks have changed their interest rates. This comes as no surprise as there have been multiple “runs on the banks” due to poor customer optimism as some banks have been engaging in ‘risky’ lending practices. These scenarios have repercussions like the Great Depression and the Great Recession of 2008.
Although there is a lot of speculation regarding the future of the economy and whether it will be a ‘bull’ or ‘bear’ market, it is always best to prepare for any financial situation good or bad. In the event of a recession, there are various effective measures that anyone can take to prevent serious losses or to ensure financial stability throughout any recession. Keeping an eye on your finances can not only help you financially, but it can save you a tremendous amount of stress. Let’s take a look at some of the ways to alleviate your finances.
Ditch the takeout
Eating out can take a hefty toll on your wallet. Instead, consider buying more groceries to save money and create amazing home-cooked meals. According to Money Under 30, the average American would save approximately 325% if they were to buy groceries instead of eating out. This big change in your budget will help alleviate financial stress.
Create an emergency fund or cash reserves
A great way to prepare for economic uncertainty is by setting some money aside. According to Bankrate’s Annual Emergency Fund Report, approximately 57% of Americans are unable to afford a $1,000 emergency expense. Anyone can build an emergency fund by setting money aside from their paycheck. You never know when you might need that emergency cash!
Cut down on expenses
Do you have a Netflix, Spotify, or Hulu subscription? Chances are, you do. You could be subscribed to even more streaming services. Consider canceling or putting a subscription on pause until consumer optimism increases. Reducing expenses enables individuals to allocate more funds towards savings or investment portfolios, thereby enhancing their financial stability.
Hopefully, the stock market rebounds, interest rates decrease, and the economy begins to flourish. However, until that happens, your best option is to stay prepared and have a solid financial plan in place. This means taking steps such as cutting back on takeout, reducing expenses, and increasing savings. By doing so, you can protect yourself from financial instability and be better equipped to weather any future market recessions. Remember, financial stability is a long-term game and the steps you take now can make all the difference in securing a bright and prosperous future.
The Content is for informational purposes only, you should not construe any such information or other material as legal, tax, investment, financial, or other advice.