Navigating Economic Uncertainty
With the current interest rate environment and unsettled economy, coupled with a high cost of living, stock market volatility, and a waning job market, economic shifts can be both unpredictable and stressful. Luckily, KEMBA is here to provide you with guidance to navigate times of economic uncertainty.
Preparing yourself now for economic uncertainty can provide you with both a financial cushion, and some peace of mind. Consider taking the following three steps to help plan for the unknown:
Step 1. Bolster your emergency fund
It’s generally recommended to have 3-6 months of living expenses set aside for emergencies. While this amount can seem stressful, there are two simple tactics to make the savings less daunting.
- First, consider cutting unnecessary expenses; review your monthly budget and look for opportunities to tighten it. For example, review your subscription services, do you use them all? Could you switch dining out for a home-cooked meal with friends? A few spending swaps can add up and provide you with a nice monetary cushion.
- The second way is by creating, and sticking to, a budget. Balancing your income and your expenses, in a disciplined fashion, is one way to make sure you have enough to make ends meet. Be cautious of accumulating substantial amounts of debt to bridge the gap between income and expenses.
Step 2. Manage debt wisely
Debt repayment, and debt consolidation, can feel very tricky and overwhelming. There are a few key ways that you can make debt management easier on yourself, to feel more stable amidst economic uncertainty.
For starters, when managing debt, consider tackling those with the highest interest first. Contributing what you can now, to debt repayment, means less costs for yourself in the long run. It can be daunting, and KEMBA is here to help guide you. Meet with a representative who can help you uncover ways to reduce your payments, your interest, or both. Perhaps two of your loans could be combined at a lower interest rate, or you could extend a repayment period for a lower monthly cost. Managing your debt is an important way to stabilize your finances.
Step 3. Stay informed
Times of economic uncertainty are stressful, there’s no question about that, but staying informed can help reduce panic. Keeping up with economic trends can help you make informed financial decisions, such as refinancing a loan, putting off a new auto purchase, or deciding on a home purchase. Reacting impulsively to short-term economic fluctuations can often do more harm to your savings than good. KEMBA’s team is always available to educate you on current rates and trends, and help you make the best long-term decisions for your wallet.