If you ask five different economists what the future holds for the American economy, you’ll likely receive five different answers. Some economists say there’s a 70% chance of a recession in the coming year. But Jerome Powell—current chair of the U.S. Federal Reserve—doubts that anyone knows for sure. “It’s not knowable,” he told the New York Times, which isn’t reassuring.
With a future that feels confusing and full of unknowns, how can you learn to embrace uncertainty? Here are six essential tips from our financial professionals for staying resilient in the coming year, no matter what life throws your way:
1. Take a Deep Breath
Remember, this isn’t the first time you’ve faced a stressful situation, and it certainly won’t be the last. But so far, you have survived 100 percent of your past crises. So, if the news cycle’s doom and gloom makes you feel stressed, it might be time to unplug, take a deep breath and find ways to address those anxious feelings.
While you’re at it, consider getting some exercise. Now, we’re not saying that you need to start lifting weights or training for a marathon—we know you’re busy. Instead, keep it simple and focus on incorporating a little more movement into your day as you’re able. Even a quick walk can improve your overall mood.
2. Establish Your Priorities
While no one wants to assume the worst, it’s wise to have a plan for it. Consider your most essential expenses, and have a plan that ensures they’re covered. For most Americans, this includes:
By budgeting for these top priorities, your most immediate needs will be taken care of, no matter what happens.
3. Build Your Emergency Savings
Unfortunately, many Americans lack an emergency savings fund. Without one, you may deplete your savings account to cover unexpected expenses or have to put those costs onto a credit card.
To avoid getting into a challenging position, make it a goal to set aside three to six months’ worth of expenses. Again, you don’t have to expect the worst to happen, but planning for it is a great way to remain steadfast in uncertainty.
4. Cut Back on Discretionary Purchases
Be honest: how much are you spending on dining out or streaming services you hardly use? If you’re not sure, that may be a red flag that you’re spending too much. In an unstable economy, you may not be able to fit these kinds of luxuries into your budget.
Try to work on cutting back on discretionary items. Everyday non-essential purchases can include:
- Dining out
- New clothing
- TV streaming services
For example, you might subscribe to one TV streaming service and eliminate the rest—or rotate them periodically. These monthly expenses can add up and hinder your spending power during a recession, so it’s wise to cut back and save some money.
5. Look for Bargains
You don’t have to become one of the “extreme couponers” you see on reality TV, but you should consider switching from name-brand groceries to cheaper, store-brand alternatives. You’d be surprised how much this can save you at checkout.
If you’re in a healthy financial position and want to build future wealth potential, speak with your financial advisor about potentially snatching company shares that are historically lower in price and help position yourself to incur the potential benefits when the economy recovers.
6. Reach Out and Help
It sounds counterintuitive to help others when you’re dreading the unknowable future, but those who help others are more emotionally resilient than those who do not.
Helping others embrace uncertainty can be as simple as giving a friend or neighbor a call, but you can also look for volunteer opportunities through community organizations. Investing in your community can remind you that you’re a part of something bigger than yourself and can strengthen your resolve during a crisis.
Embrace Uncertainty with the Right Financial Plan
You’re probably familiar with the old phrase, “Hope for the best, but plan for the worst.” Cliché as it sounds, there’s a lot of wisdom in that statement. That’s why Concorde’s financial advisors help you face the future with greater confidence. Contact us today to learn more and speak with one of our financial professionals about your future.
This is for informational purposes only, does not constitute individual investment advice, and should not be relied upon as tax or legal advice. Please consult the appropriate professional regarding your individual circumstance. Past performance is not indicative of future results, and forecasts are inherently limited and should not be relied upon as an indicator of future results.
Data contained in this material was obtained from third-party sources believed to be reliable; however, CIS, CAM and CIA do not guarantee the accuracy of the information.
Securities offered through Concorde Investment Services, LLC (CIS), member FINRA/SIPC. Advisory services through Concorde Asset Strategy, LLC (CAM), an SEC -registered investment advisor. Insurance offered through Concorde Insurance Agency, Inc. (CIA)