Three Things To Help Prepare Yourself For A Recession
A question that is on the mind of many people is, are we headed for a recession? I’m going to give an answer that may shock you at first…yes. Before you panic, the answer is always yes because our economic system works in a cycle. We will never be absolved from recessions. There is a sense that there will always be a recession out ahead of us.
In the spirit of the question, we really want to know if it’s a short distance ahead or further out. We can’t predict what will happen in the future, especially in this unique time, but we do have a few things for you to think about relative to your overall financial plan. Keep in mind, these three things are important to remember whether we are in the middle of a recession, at the beginning of one, at the end of one, or a long way off from one.
Maintain financial flexibility.
You want your plan to be in a space where, regardless of what’s happening economically, you have financial flexibility. Now, you can’t absorb everything that comes at you. Especially in this time of COVID-19, it’s not the type of thing for which anybody could reasonably plan.
You always want to build as much financial flexibility into your plan as possible. If the unexpected arises, and you lose your job or a recession hits, etc., you can absorb it and maintain the space where you are.
Keep a long-term perspective.
It can be hard to do this. It’s difficult to look at the long-term when things are challenging but it’s important to keep that long-term perspective so you can make good decisions today. Those good decisions will benefit you at some point in the future.
Build in slush.
Make sure you have built in slush for yourself, so you have an emergency fund to access. If you go through times that are unexpected an emergency fund helps to get you to the other side without impacting your long-term financial plan in a negative way.
If you have questions about your financial goals or would like to talk with us further about our services, give us a call at (704) 987-1425 or visit us at https://www.northmainfinancial.com/contact. If you wish to schedule an introductory meeting, we would be happy to meet with you at no cost or obligation to you.
You may also be interested in the following articles:
Be Prepared For an Emergency by Maintaining Financial Flexibility
Tackle an Unexpected Life Event by Stopping to Breathe
These Blogs are provided for informational purposes only and should not be construed as investment advice. Any opinions or forecasts contained herein reflect the subjective judgments and assumptions of the authors only and do not necessarily reflect the views of SagePoint Financial.