The storm is all around us. Warning signs now point to an extended storm and after-storm. If you think of it like a hurricane, the country may be in cleanup mode for years once the storm subsides. More and more CEOs and other business leaders are predicting the turbulent times — they are sounding the alarm and differ only on how long the effect will last. That’s the bad news. But there is good news for you.
Despite the doom and gloom which is worsened during an election year, you can beat the system and protect yourself. You do not have to participate in the shenanigans, and there are ways you can win with your finances. Walt Disney said over 50 years ago, “I’ve heard there’s going to be a recession. I’ve decided not to participate.”
You can make that decision regardless of where you are in your financial journey, but that decision must have action. It must have feet and teeth.
Three ways to gain traction with your finances if you’re stuck or find your bills increasing: Increase income, reduce expenses or sell something. Today more than ever, it may be time to try all three at the same time. You don’t have to do them all, but find one or two and get to work today. Even if you believe you’re in a good place, it’s a good time for a check-up. Here are some essential tips.
Do. Not. Panic. Emotional decisions are almost always lose-lose. There’s a rhyme and reason to the craziness, and you’ll do well if you become one of the few adults in the room. Don’t feel pressured or hurried. Examine your situation, put together a well-thought-out plan, and implement it.
Action point. Take your time, get counsel and follow time-tested advice.
Assess your situation. Do a check-up. Get all your finances in front of you and make a plan. This shouldn’t take long, but don’t make decisions without having all the details. Take it one step at a time: Build an emergency fund and cut unnecessary expenses.
Action point. Get an app, a spreadsheet or a basic kitchen napkin. Map out your strategy. Write down your income and all expenses so you don’t forget anything.
Get rid of your credit card balances. Credit cards will sink your finances, even in good times. But in tough times, credit cards, especially those with high balances and APRs, will ruin your budget. Get gazelle-intense to pay these down quickly.
Action point. Start with the lowest balance, knock it out, and then start on the rest.
Review your subscriptions. Do you need everything you have? Hulu, Netflix, Spotify, Amazon, Stitch Fix, Apple, BarkBox, Chewy.
Action point. What can you do without, even if for a few months? If you must have it, call to check on new promotions that may be available to cut your expense.
Review recurring expenses. Car and home insurance. Life/health insurance. Internet. Cell phone.
Action point. Sit down with your insurance agent(s). It’s a good time for a review. Shopping for other options is okay, but be sure you’re comparing apples and apples and not just looking for a lower rate.
Invest spare funds. Loose cash is your friend, so put it to work for you. With inflation climbing north of 8%, anything you can get in return is a benefit and closes the gap. Savings and money market accounts are better than nothing, but they beat leaving your funds in a simple checking account. Otherwise, call your investment professional and cut the gap between what you’re earning and inflation. Stay away from high-risk schemes or those too-good-to-be-true investments.
Action point. This isn’t a time to “go it” on your own. Talk to your financial advisor. Here are two financial advisors who won’t steer you wrong. Call (720) 724-2170 and ask for Mark or Paul. They’re my guys and highly recommended.
Consider a side hustle. A few extra work hours on the side each week will add up fast. In addition to the well-known Door Dash and mowing grass opportunities, here are other ideas. See which one resonates with you.
Action point. If you work an extra 20 hours a month (5 hours per week), you can more than make up the difference in inflation.
Check your own company for extra hours. Before considering the side hustle, though, why not ask your current boss about extra hours? In today’s work environment, employers are always looking for additional workers. You may find that another department needs workers. Become their extra worker.
Action point. Sometimes the answer is right under our noses, so you may have an easy solution. Talk to HR or your boss today about a few extra hours.
Beware of significant purchases. Probably not the best time for major purchases like homes, cars, boats, or long trips, especially if you have substantial other debt. Cars are at an all-time high, and dealers are not dealing. Whatever you buy today won’t hold that value for long, and you can risk being upside down very soon. If you have to buy, be shrewd, shop like your (financial) life depends on it, and talk it over with someone you trust.
Action point: Invest in your current home, make repairs on your current vehicle and wait out the storm.
As you know by now, this is not a drill. Regardless of where you stand financially, the best course of action is to take action.