As we soon enter into a new year, you may be focusing on goals that you’d like to achieve in 2023. Oftentimes, financial related resolutions can consist of cutting up credit cards, paying down debt, and building a savings. With recent economic trends though, it may be wise to hold off on cutting up the credit card, though we certainly recommend building your savings up. The start of a new year is a great time to review, adjust, and protect your finances. Here are our recommendations to strengthen your finances during a looming recession.
Build up your emergency fund
Create or add to your emergency fund as often as possible. Budget for a portion of funds to go to your emergency fund each payday. Review your budget to see where you can start saving more money to be tucked away. Make it easier on yourself to automatically transfer a portion of funds from your paycheck when you sign up for electronic transfers on your direct deposit.
Cut down on unnecessary expenses
Saving in little ways can make a big difference in your budget. Skip going out to eat multiple times a week and meal prep to cut down costs. Buying your groceries in bulk can also help stretch your dollar. Cut out other unnecessary expenses that you don’t use such as gym memberships, streaming services, monthly subscription boxes.
Earn extra income
Diversifying your income streams can allow multiple sources can increase your savings. Search for multiple ways to bring in income. Experts suggest finding income streams that are not all in a similar or related industry than your full-time job. This can help the prospect of job loss from affecting your streams of income. Check out these 27 side hustle ideas to inspire!
Stay invested in financial markets
Many people often get spooked by the dip of stock markets during a recession, but keeping your funds invested can be a valuable tool once a recession ends. In short, it’s ideal to keep a long-term perspective even if there are short-term losses. While it’s recommended to continue contributions to your investment portfolio, always adhere to financial advice from your specific financial advisor pertaining investments in your portfolio.
Before making any big financial decisions, take a few deep breaths and weigh the consequences. Keeping in a calm-minded state can stop you from making any financial decisions that you may later regret. While it’s natural to feel a bit of recession-related anxiety, remember that the economy will bounce back, as we’ve seen time and time again throughout history. While it may be difficult to predict exact future economic pitfalls, these few steps will ideally help prepare you in the event of a recession. And while we may never foresee what any given year holds for us, preparation and a positive mindset can become a big factor in the future of your finances!
Eastex Credit Union is always here for your financial needs! We have tools available such as our Savings Calculator that can help your savings stay on track in the midst of a looming recession. We are also readily available to help consolidate debt, refinance your auto, and any personal loan needs that are designed to help you reach your financial goals. Contact us for any questions.