By Adriana Morga, Associated Press
NEW YORK (AP) – Unstable financial markets. Consumer confidence is at the lowest level in five years. Economists say the risk of recession increases.
Everything adds financial uncertainty for many Americans. About half of US adults said that Trump’s President’s trade policy would increase the price of “a lot,” according to a recent opinion poll by the Press-Norc Associated Public Affairs Research Center. And about half of the Americans “very” or “very” worried about the possibility of the US economy to enter the recession in the next few months.
Matt Watson, CEO of Origin, financial planning application, said this is a period of uncertainty for everyone, including experts.
“No one has a crystal ball. No one, even people who do this professionally and have done it very successfully for years, know what will happen,” he said.
If you are worried about how economic uncertainty can affect you, here are some expert recommendations:
Pay attention to your finances
The first step to prepare for an uncertain financial time is to know your starting point, said Watson. Look at your budget or expenditure your debit card so you can understand how much you spend every month.
“Pay attention to where you are in a number of different categories,” Watson said.
Seeing the state of savings and investment you can also give you a picture of your overall financial health.
Find where you can reduce
The more unimportant expenses that you can break, the more you can save for an emergency.
“Your choice is completely cut now or cut later, so it’s easier to cut now and have a pillow,” Watson said.
If you have difficulty finding where to reduce, Jim Weil, managing partners in Private Vista, a financial planning company, recommends that you divide your expenses into three buckets: needs, desires, and desires. Desire is a greater expenditure that can be postponed, such as a vacation to Europe.
For now, cut the fees from the wishes until you feel like your finances are in a good place.
Take care of your mental health
Between news about tariffs and loss of jobs, you might feel your anxiety increase. So, it is important for you to protect your mental health while also concerned with your finances, said Courtney Alev, consumer advocates in Karma credit. Sometimes, reading too much news that can affect your finances can become arrogant and create more stress than you need.
“Good exercise to keep information but you don’t want to let the news cycle consume you,” Alev said.
If you find yourself to feel the level of stress or high anxiety in your finances, the best is to contact a professional who can help you, like a financial therapist.
When looking for regular mental health services, most health insurance includes several types of mental health assistance. If you do not have health insurance, you can look for sliding scale therapists throughout the country, including through findtreatment.gov and American Association and Depression Association Directory.
Focus on what you can control
Instead of being too worried about the economy of the whole country, Alev recommends that you focus on aspects of your personal life that you can control to feel more confident if there is a recession.
“Identify every change that you might need to make to have more safety nets that can give you confidence,” said Alev.
Things that you can control include budgeting, creating emergency funds and cutting unnecessary costs.
Make an emergency fund
Are you worried about the safety of your job or the high price of goods, the best is you sit and re -judge your budget to make an emergency fund. Emergency funds can be felt that cannot be achieved if finance is difficult, but even has a little cash that can be saved can make a difference, said Alev.
Ideally, your emergency fund should be three to six months.
Weil recommends that you start thinking about special commitments that you might have in the next one or two years, such as tuition fees or moving. If you plan for a large financial commitment in the near future, Weil recommends that you plan to build a larger emergency fund.
Do monthly financial check-in
Alev recommends regularly adjusting your budget to maintain your financial goals on the track. The monthly budget check-in can help identify when you spend excess money or if your needs change.
“The budget is only as good as to help you really make decisions, so don’t be afraid to update and adjust your budget like the moon passes,” said Alev.
Choose which type of debt to be handled first
Many Americans struggle with debt, whether it is credit card debt or student loan debt, which limits their ability to save. However, if you want to make an emergency fund while also handling your debt, it will require some priorities.
“I will think of various types of debt differently,” Weil said, adding that you can put debt in three buckets: short, medium and long -term debt.
Weil recommends that you prioritize paying off high flowering debts like your credit card. By making additional payments or paying a minimum payment, you will be able to pay it off faster. Student loan debt and long -term debt such as mortgage can be handled with simpler payments when you focus on making emergency funds.
If you have a credit card debt and you cannot make too much progress in paying it, Alev advised you to try to eliminate or reduce the amount of credit you use.
Don’t panic about your investment
While the stock market experiences a few bad days, the best is that you are not reactive to the market. If you have an investment, especially in your retirement vehicle such as your 401 (K), you should not make a decision in a hurry, said Alev.
“You really want to try not to panic. It can be scary but most likely, you must have time to make it up,” he added. If you are closer to retirement, Alev recommends that you see a more conservative investment.
The Associated Press receives support from the Charles Schwab Foundation for education reporting and explanations to increase financial literacy. The Independent Foundation is separate from Charles Schwab and Co. Inc. AP is fully responsible for its journalism.
