Lately, it seems as though everything falls under the umbrella of uncertainty. Between an ongoing pandemic, global unrest, and political instability, we have daily reminders of just how unpredictable life can be. When unpredictability gains steam, we start seeing shocks to the stock market and the economy, as evidenced by increasing inflation, unemployment woes, supply chain issues, and plenty of volatility in the market.
Have these roller-coaster ups and downs made it hard for you to make decisions or plan for the future? You’re not alone. As we traverse continually turbulent waters, here are 5 money moves you can make to feel a little more prepared for whatever lies ahead.
1. Strengthen Your Emergency Fund
As the old proverb says: “Prepare the umbrella before it rains.” Building an emergency fund is the same as preparing the umbrella—it’s the foundation of financial preparedness. Generally, you should have enough money to cover 3-6 months of basic living expenses (mortgage, utilities, groceries, etc.). This money should be held in a highly liquid account so it’s readily available should an emergency occur. Look for an account that offers a competitive interest rate. You worked hard for that money, now put it to work for you.
2. Watch Your Spending
If the emergency fund is the umbrella, then budgeting and tracking expenses are the sturdy rain boots you wear when the storm clouds come rolling in. Tracking spending habits can be difficult, especially in trying times, but thankfully there are several apps that will do it for you. Once you have a good idea of where you currently spend money, you can begin to build a budget around where you want your money to go. This can be modified as needed as time goes by and life changes so that you are better prepared to withstand potential fluctuations in income.
3. Manage Risk
Risk management is a great way to safeguard what you’ve already built. Unmanaged risk can mean the difference between maintaining an ample emergency fund or not having enough when you need it the most. Be sure to review your insurance policies, taking care to bring them up to adequate coverage levels. This should include life, health, auto, and homeowners insurance at a minimum, but disability, umbrella liability, and long-term care coverage should be considered as well. These risks are often overlooked and can be devastating to a financial plan. Making sure you are adequately covered now will save you time, money, and energy in the future.
4. Evaluate Your Investment Allocation
Investment allocation and risk tolerance are important factors to consider when assessing financial preparedness. If your investment allocation does not align with your risk tolerance, it can lead to unwise investment decisions. It’s common for people to feel worried when they see their investment values fall during a financial crisis, but a properly diversified investment allocation specifically tailored to your level of risk tolerance can alleviate quite a bit of the stress surrounding market volatility. This helps to keep you invested through the downturns so you can benefit from the potential growth when the market eventually recovers. In this case, “stay the course” is tried-and-true advice, especially if you have a long time frame before retirement and a sufficient emergency fund to get you through difficult times.
5. Partner With a Financial Advisor!
Navigating life’s uncertainties is always easier with a partner by your side. Especially when it comes to finances, enlisting the help of a professional (whom you trust to provide objective advice) is arguably the wisest move you could make! Making smart financial decisions doesn’t have to be difficult or overwhelming, and we at T.A. Holland & Co. are here to help you along the way. In fact, we specialize in creating practical risk management solutions to help our clients accumulate and preserve wealth.
If you’re ready to take the next step in your financial journey, we’re here to help you navigate the unexpected. Reach out to us at info@taholland.com or 617-523-5656 to schedule a complimentary appointment so we can get to know each other.
About T.A. Holland & Co.
T.A. Holland & Co. was founded in Boston, Massachusetts, in 1920, and serves individuals and businesses throughout the country. We provide cutting-edge financial services with a broad array of solutions to help our clients grow and preserve their wealth. We have seen good and bad economic times. Through it all, T.A. Holland & Co. has thrived by always making the customer our #1 priority. We get to know you and understand your needs so we can provide you with the proper guidance and strategies. Our senior vice president, John Hellmuth, has been at the helm of T.A. Holland’s financial services since 1990, but he doesn’t do this job alone. He is joined by his two children, Lindsay Hellmuth and Thomas Hellmuth. As CERTIFIED FINANCIAL PLANNER™ practitioners, our financial services team has the knowledge and experience to help you solve your most pressing financial challenges. To learn more about how we can help you, visit our website and reach out to us at (617) 523-5656 to schedule a complimentary get-acquainted meeting.