7 Ways to Manage Money in Troubled Times

 In Ozarks Live

7 Ways to Manage Money in Troubled Times

During the pandemic, there are many policies changing everyday.  The world is in an uneasy place and many people feel uncertain about how to best manage money and their financial future.  At The Resource Center we are getting all of the most up-to-date information and I want to help you understand what to do with that information and how it can help you.  If you have a question about your individual situation you can call us at 417-882-1800.  

Below are our top 7 Ways to Manage Money in Troubled Times. 

#1 Short-Term Safety

In the short-term consider giving yourself stability with strong cash reserves.  I suggest having 3 months of monthly income on hand in a checking account, especially during troubled times.  If you still haven’t spent your stimulus check, DON’T! That can add to your cash reserves should some crisis require it.  Unemployment, medical or emergency home expenses could happen at any time.  During uncertain times you can’t go wrong with having EXTRA cash reserves.  Keep these extra funds in an interest earning account such as a Kasasa Account.

#2 Paper Losses

A paper loss occurs when the current stock price is lower than the price a person originally paid to purchase it.   Losses are only losses if you sell a position when it is down.  Just because your accounts are down, doesn’t mean you have lost any money.  If all of a sudden you NEED all your money and you have to sell, you may be at a loss.  My best advice for this scenario is,“don’t panic”! If you are patient, perhaps those accounts will come back up.  Now it may take time for those accounts to rise but if your plan on how to manage money hasn’t changed, refrain from dramatic decisions and let those “losses” be returned to you.  

#3 Leave The Money Management to the Pros

Professional guidance is always recommended, especially if you’re uncertain about how to manage money or if you have concerns about what is happening in the market.  Seeking guidance from those professionals who understand the current market can be very reassuring.  Professional guidance can calm your nerves when you are experiencing fluctuations in value. They can help you to review your current goals and objectives and to evaluate what you are trying to accomplish with your money.  Don’t hesitate to call and talk to us or schedule a safe in person visit

#4 Just Hold On

With all the news and discourse about the market, it can be very tempting to react out of fear. Before you make any choices, take a deep breath and review.  Review your goals, objectives and priorities for your how you manage money.  If nothing about your plan has changed, just hold on and stick it out.  Even with all the concerning reports it is probably not going to be that big of a deal in the long run.  Especially if you have planned wisely with your professional and are well-diversified.

#5 Supplemental Retirement Income 

Social Security solves all your problems when you’re retired, right?  That’s not often the reality…  Many Americans’ only retirement income is from Social Security and when that is the case you may have to be very frugal with the amount of income provided.  My grandma knew this lifestyle and kept the wrapper from every loaf of bread she purchased.  However, if you have the ability before retirement to make sure that you have some supplemental income to draw from when you DO retire, you will be in a much stronger financial position.  When you plan for supplemental retirement income the most important thing to consider is how much income can I leverage upon retirement and how long will that income last me?  Learn more about navigating retirement in my book ‘Finding the Courage to Retire’

#6 Play It Safe

Play it safe.  If you are nearing the retirement summit that is very good advice.  However, if you are young enough and have the mental and emotional fortitude to ride the roller coaster during times of trouble, there may be some advantages to taking some well planned risks.  During times like the ones we are experiencing in 2020, there are bargains to be had but I would seek professional advice before making any decisions about your current strategy to manage money. 

Another area in which it is wise to play it safe is in day trading. Day trading usually means you buy and sell financial instruments within the same trading day.  Day traders are referred to as speculators.  There are a lot of people that day trade or dabble in the market with Ameritrade or an online type of account.   My advice to those people is to take their gains every quarter and put them back in cash or safety.  Operate with a fixed amount of money, get your gains from that fixed amount, then secure those gains and always be working yourself into a better position.  Putting your gains aside will minimize your risk to your nest egg, especially if you are nearing retirement.

#7 Don’t Put It Off Managing Money Until Tomorrow

Don’t be complacent with how you manage money.  Take the time to review your plan on a regular basis.  Stay informed and up to date on how your plan could be effected by market changes.  Never hesitate to reach out to us for help understanding and navigating your options. 

Bruce Porter has a book out called, ‘Finding the Courage to Retire’.  Each Week Bruce Porter is a guest commentator on KOLR 10’s Ozark Live.  To get first access to our video re-run, Subscribe to our YouTube page here.

We are an independent firm helping individuals create retirement strategies using a variety of insurance and investment products to custom suit their needs and objectives.  This material is intended to provide general information to help you understand basic financial planning strategies and should not be construed as financial advice.  All investments are subject to risk including the potential loss of principal.  No investment strategy can guarantee a profit or protect against loss in periods of declining values.  

The information contained in this material is believed to be reliable, but accuracy and completeness cannot be guaranteed; it is not intended to be used as the sole basis for financial decisions.  

We are not permitted to offer, and no statement contained herein shall constitute, tax or legal advice.  Individuals are encouraged to consult with a qualified professional before making any decisions about their personal situation.  Our firm is not affiliated with the U. S. government or any governmental agency.  Investment advisory services offered only by duly registered individuals through AE Wealth Management, LLC (AEWM).  AEWM and The Resource Center are not affiliated companies. #680293

 

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