Whether you’re worried about losing your job, concerned about your investments, or just feeling uncertain about the economy, this episode gives you a clear action plan to turn anxiety into productive financial decisions.
“How do I navigate the current economic uncertainty?” This was the most-requested topic at a recent conference we attended. If you’re wondering the same, you’re clearly not alone.
Instead of worrying, get a strategy in place so you know you can ride out any uncertain times that may lie ahead.
We’re explaining what recessions actually are (versus what people often assume they are), why they’re a normal part of economic cycles, and most importantly, how to protect your finances without making emotional decisions you’ll regret.
You’ll learn why the stock market and recessions don’t move in sync the way you’d expect, the critical difference between managing your long-term investments versus short-term cash flow, and practical steps to recession-proof your finances: from building the right emergency fund to knowing when (and when not) to adjust your spending.
We talk through:
- What defines a recession (and why it takes 6+ months to officially call one)
- Why you shouldn’t change your long-term investment strategy during market downturns
- The truth about “buying the dip” and dollar-cost averaging
- How much emergency savings you really need during uncertain times
- Why it’s helpful to create a bare-bones budget for worst-case scenarios
- When to pause big financial decisions versus when to move forward
Visit beyondyourhammock.com/schedule to request a free one-page financial plan and explore working with us.
KEY TAKEAWAYS
1. Recessions are normal part of market cycles (not signs of the end times).
We can’t predict their exact timing or triggers, but we do know to expect recessions to happen periodically.
2. Market corrections are not the same as recessions.
The stock market often declines before a recession is announced and recovers before it officially ends. Making investment changes based on recession fears typically backfires.
3. Separate long-term planning from short-term cash flow.
Your retirement accounts and your monthly budget require different strategies during uncertain times.
4. If you have a plan, stick to it.
If your investment strategy was designed to weather market cycles, don’t abandon it when emotions run high. If you don’t have a plan, get one before making reactive decisions.
5. Keep contributing to retirement accounts.
Dollar-cost averaging during downturns means you’re buying more shares at lower prices, which benefits you when markets recover.
6. If you’re worried about economic uncertainty, build (or boost) your emergency fund.
Having 3-6 months of expenses in cash provides peace of mind. The best action you can take if you’re worried about your finances is to proactively increase your cash cushion.
7. And be strategic about big financial decisions.
Another proactive step to take is to think long and hard about any pending financial decision (particularly one that will lock in something you can’t easily reverse, put a big fixed cost in your cash flow, or both). You don’t have to pause your entire life, but be mindful about major expenditures or income changes during uncertain periods.
8. Time in the market beats timing the market.
Staying invested through ups and downs has historically outperformed trying to predict the perfect moments to buy and sell. Having objective guidance can help you stick to a sound strategy, too. Working with a financial advisor helps you see blind spots and make decisions based on your specific situation, not fear or media hype.
Ready to create, use, and enjoy money for life? Request a complimentary consultation with us at BYH and discover how to optimize your investments, reduce your tax burden, and grow your wealth: https://beyondyourhammock.com/schedule