How To Manage Your Money During An Economic Downturn

Read on for pro tips on how to manage your money during tough economical times…

It’s been a scary and uncertain past few years. Businesses have taken a huge hit, dragging the economy down with them. Watching the stock markets dip and hearing of people losing their jobs is undoubtedly concerning, and can add to the stress that Covid-19 has brought to our lives, but we must try our best to focus on controlling what we can.

Though it’s true that the downsides of the economic downturn outweigh the upsides, the best we can do right now is to remain hopeful and make the most out of the current situation. Here are some pro tips on how to do just that. Keep reading to find out how to manage your money amid a recession.

Read more: Financial Goal Setting 101

Assess Potential Risks

Seeing stocks in the red can be alarming, but don’t panic. If you have long-term investments in place, this should just be a blip that will pass. The market is known to constantly fluctuate and has seen and recovered from a number of crashes over the years.

It’s fine to dabble in investments if you have the money to spare. But take the current economic downturn as a reminder that the market can turn at any second. It’s probably best to hold off on investing at the moment if your savings account isn’t looking so hot. Especially amid such uncertain times, you want to make sure you have enough money stowed away in case something unexpected were to happen.

Seize The Advantages

If you have been interested in investing in stocks and have the capacity to, you’d be pleased to know that there are a lot of good deals in the market at the moment. Some companies which were previously overpriced are now trading at more reasonable prices. This opens up some great opportunities for long-term gains for the patient investor. If you can afford it, it would be worth hiring a fund manager who can help you score some great stocks at bargain prices.

Manage your money

Taking a close look at our finances and getting a handle on our budget plan is something we know we all need to do. But we can never seem to find the time to get that sorted. Since we are still keeping our social events to a minimum and spending more time at home, we have no reason to put this task off any longer.

Now is the perfect time to look at our spending. Sure, those masks and hand sanitisers cost an arm and a leg, but you probably saved a good sum over the past couple of months by not going out as much. Take this opportunity to work out how much is being spent on essentials each month. It’s also a great time to think of your long-term dreams and start planning how to save up for those bigger investments.

Get some professional advice

If you’ve never spoken to a financial adviser before, now may be a good time to do it. This would involve a review of your current situation, your emergency funds, insurance needs, current investments and how these can be structured to meet your goals – even amid tough economic times. Even if you don’t have a financial goal in mind or any current investments, it’s something to at least start thinking about.

Read more: I’m 29 And Just Saw A Financial Advisor For The First Time