Some economists are predicting an upcoming recession. Many of us have lived through tough times before and remember the changes in life and escalated family stress. . If you have a job, it might disappear. The value of your investments (so good now) will drop and of course, any recession has a negative impact on housing prices, car sales and small businesses.
How do we deal with those changes or how can we prepare?
- Make sure that you are doing a stellar job. Look at your goals and make sure to exceed them. Track your performance.
- Become a key part of important, high-profile projects. Volunteer to assist on major projects and make contributions when you can. The final say in who stays and who goes is usually the boss. Help your boss succeed.
- Build your network of professional contacts both personally and online. If the worst happens, new jobs often are obtained because you made a positive impression on someone. Do not be afraid to network; now is the time to get involved.
- Get education and certification that is valuable for your future. Make this a priority!
Russ Karban – Vice President and Managing Executive at Savage and Associates offers this advice:
- Work with your financial planner – make sure that your investments are in your comfort zone.
- Have a game plan for cash distribution and build a strong contingency fund. Having a few months of living expenses in your account helps when there is a downturn in the economy. Save more now while you are working,. it will make life easier to manage.
- Reassess your financial plans regularly changing goals as your lifestyle changes. Be sure to ask the hard questions of your planner. Talk to them about your needs and what kind of risk you can tolerate.
- Do not try to “time” the market. It would be nice to know when to buy low and sell high but few can master this. Let your investments ride and make changes when prudent
- If you do not intend to touch anything for more than 10 years, leave investments alone and ride out the storm. While it can be tempting to move money into safer investments upon a stock market downturn, market-ups-and-downs are a normal part of investing.
Preparing for an increase
in family stress
Financial changes cause money stress which can be extremely damaging to your marriage and family life.
- Learn to communicate so there are no surprises. Make it clear what issues will come up and how changes may be needed – a vacation may be cancelled or a large purchase won’t happen.. This helps everyone prepare for change and provides an opportunity to work together to weather the impact.
- Find inexpensive ways to bond as a family or a neighborhood. Plan things that are free or almost free. Gather neighbors for movie nights, attend community concerts and plan potlucks.
- Since you are unsure how long this downturn will last, do not make spending plans for the future. Minimize talk of what you are going to do when money comes back, setting up false expectations. The best approach is to plan for a sparser lifestyle while building up your financial security.
- A little preparation now makes it easier to face a downturn in the economy. You will feel better about your future. Get started now.