It seems that every day, you hear more distressing news about the state of our economy. With the word “recession” floating around, many Americans have questions about what to do with their finances to handle a potential fall in our once robust economy. So, what exactly should you be doing to protect your financial health during this uncertain time? As your local support, Yolo Federal has put together six tips to help you stay financially healthy during a crisis.
Learn to Budget
Budgeting now will be invaluable if the economy should drop. This is especially important as many people may find themselves out of a job. Work bonuses, raises, and promotions are not handed out as readily during a recession. Go through your monthly expenses and start identifying expenses that you can live without. Do you really need subscriptions to three or four different streaming services? We know you may think that having a variety of options is essential, but narrowing down your subscriptions to one or two a month could save you money. Look for other “leaks” in your budget and find ways to plug them.
Avoid Panic Buying
After considering your budget, think about what you are currently buying when you head to the grocery store. Panic buying (commonly done during peak Covid) is a surefire way to purchase a bunch of products you don’t need, thus reducing the supply that another family may be in desperate need of. When you’re putting things into your cart, ask yourself, “Do I need ten packs of toilet paper?” or “Am I buying this because I’m anxious?” We cannot stress this enough: don’t panic buy! Your finances will thank us.
Watch for Scams
Scam artists use fear to their advantage. Many are using phishing techniques to deliver malware onto victims’ computers. These fraudsters can manipulate their emails to look like they are coming from a reliable source, and it is up to you to determine real from fake. We have previously outlined scams surrounding the Coronavirus and how to identify phishing emails. Check out our security blog category to learn more.
Stress Less Over Your Investments
As we watch the stock market fluctuate, many people are considering pulling funds from their retirement accounts. When you see your investments drop by as much as 10% a day, it may seem like a good idea to get out to spare yourself from further loss. However, many financial professionals say otherwise. Most sectors of the economy are expected to recover, and your investments will begin to build again. Patience is key. If you have questions or concerns about riding out the economic wave, contact our CFS* Financial Advisor, Monaye Nelson-Morgan at (858) 530-4495 or email@example.com.
Save Your Tax Return
Your tax return may very well be your largest check of the year. Consider putting it into your emergency fund until things calm down. You can always move it at a later date, but should you need to cover an expense down the road, you’ll be grateful that you set aside some savings.
Cash is Not the Solution
We understand that this is a scary time, but as more and more businesses move to cashless transactions (and because you can’t use cash online), having large amounts of money sitting at home is not secure. The safest place for your money is inside a credit union or bank, where your funds are insured for up to $250,000 per depositor.
As your local partner, we want you to know that we are here to help you get through this financially complex time. If you have concerns about your finances or your account, please contact a Yolo Federal representative. Schedule an appointment with a Yolo Federal representative or use secure chat through online banking to discuss your account.
*Non-deposit investment products and services are offered through CUSO Financial Services, L.P. (“CFS”), a registered broker-dealer (Member FINRA/SIPC) and SEC Registered Investment Advisor. Products offered through CFS: are not NCUA/NCUSIF or otherwise federally insured, are not guarantees or obligations of the credit union, and may involve investment risk including possible loss of principal. Investment Representatives are registered through CFS. The Credit Union has contracted with CFS to make non-deposit investment products and services available to credit union members.