When life throws challenges at you, it’s easy to lose perspective. We sometimes only see what’s right in front of us instead of remembering the bigger picture.
Giants are extra big when seen up close. Similarly, it might feel like the current economic downtrends will never go away. But if you know anything about finances, you probably know that recessions happen… and they come to an end.
At Portage Bank, we encourage you to keep a balanced perspective on the recession. Don’t pretend it’s not happening, but don’t despair, either. Yes, you might be facing a giant, but giants have been defeated before.
Recessions happen every five to ten years as a normal part of any economy. The important thing is to keep your head on, control what you can, and create a plan.
Listed below are some tips for staying ahead and staying smart about your money during a recession:
- DON’T PANIC
Recessions can be scary. You might face a lack of job security, a diminishing return on investments, a decrease in income due to inflation, and a rise in prices. That is a pretty bleak forecast. But there will always be factors that you can control. You are not entirely at the mercy of the economy. Once you start taking the reins over your budget and spending, you will be amazed at how much headway you can gain.
No matter how much loss you face, there are still financial strategies you can employ. As mentioned above, recessions happen, and the economy always straightens itself out again. There may be bumps in the road, but you can always make moves to limit the impact.
- CREATE A PLAN
Making a plan for your money is always a great idea. As discussed in our previous posts, money is not a stagnant commodity. Either it will attack you, or you will attack it. Only one contestant can win.
You might fear financial planning because you are worried about failure. This is understandable; however, don’t be afraid to mess up. Even the pros sometimes bite the dust. But you will still be in a better position with a failed but well-meaning financial plan than with no plan at all.
- SAVE WHERE YOU CAN
Saving for emergencies and paying off debt should be a given. These basic steps enable you to face any financial challenges with peace of mind and the motivation to get ahead.
- INVEST YOUR MONEY
Is a recession still a good time to invest? Absolutely! It can be a great time if you know where to put your money. For example, now is a fantastic time to invest in Money Market Accounts, and Portage can offer excellent rates. If you have already invested, it might be tempting to pull that money out, but that’s the worst thing you can do. When the market picks up, you will be in a great position to accumulate compound interest on your investments.
Surprisingly, sometimes financially challenging times motivate people to put their game face on and tackle the problem and, therefore, attain even more success. Hard times often create the motivation to start building new habits, making smart plans, and seeing big payoffs. Portage can help you every step of the way. Contact us today, and let’s talk about how we can help you stay afloat even during a recession.