A global pandemic, volatile markets, quarantine…2020 certainly has not gone as expected. Forget “uncertain times”—more like scary or downright panic-inducing. In the midst of unprecedented volatility regarding the markets and employment, it’s normal to experience a multitude of emotions, including uncertainty and fear.
Yes, there’s plenty to worry about—that’s to be expected given the situation. But the key is to worry about the right things.
As most of what’s happening in the world right now is beyond our control, let’s focus on what we can control—like our actions (and reactions).
Here are four actions within your control that will help you manage your finances in a crisis.
The first (and arguably most important) step is to stay calm. With all the scary emotions stirring, it’s easy to make rash decisions. But rash financial decisions almost always end in regret. Before making any big decisions, try to look at them objectively and weigh all the pros and cons—for both the short term and the long term. Better yet, speak with a financial advisor who can help you expand your view, see the big picture, and act appropriately.
Create A Crisis Budget
Desperate times call for desperate measures. Most of us are feeling some degree of financial pressure right now. It’s never a bad idea to revisit your budget and look for ways to cut back until hard times pass.
The idea of downsizing and living a more frugal lifestyle doesn’t sound fun, but you’d be amazed at how fast humans adjust to new circumstances. Give it a week or two, and your adjusted living conditions will start feeling like the new “normal.”
When it comes to investing, we all know not to put all our eggs in one basket. But this applies to income streams as well.
Relying on one source of income to stay afloat is risky business. To minimize this risk, look for side hustles you can do to bring in some extra money (bonus points if your idea is recession-proof and can be done from the safety of home).
Follow The Plan
Having a plan in place when calamity strikes prevents you from panicking and making costly financial mistakes. But if you find yourself without a plan currently (when you actually need one), don’t worry. The financial choices you make during a crisis can make or break your future wealth and security, so it’s never too late to put a plan in place.
If you’re unsure about how to handle your finances during these stressful times, it’s best to speak with a financial advisor. Our advisors at Nichols Financial Strategies will show you how to weather an economic storm and teach you exactly how to defend yourself during a crisis. If you’re interested in setting up your own smart financial plan, reach out to us at 559-440-6999, or email firstname.lastname@example.org. I look forward to hearing from you.
T. Matthew Nichols is founder, CEO, and wealth advisor at Nichols Financial Strategies with more than 20 years of experience in the financial industry. He spends his days serving business owners and families, specializing in helping those in the agriculture industry proactively prepare for the unique challenges they face in a rapidly changing economy. Matt holds his FINRA Series 7 and 63 securities registrations with LPL Financial and his California State Life & Health Insurance license. He’s also pursuing his ChFC designation and is dedicated to continuing his education and staying abreast of the latest financial trends and strategies. Matt’s mission is to help his clients transfer wealth from one generation to the next and work towards achieving their goals so they can spend more time on what they love most. Matt was born and raised in the California Central Valley and resides in Fresno with his wife, Christy, and their two daughters, Holly and Jillian. He enjoys golf, traveling, skiing, and spending quality time with his family. To learn more about Matt, connect with him on LinkedIn.