How to Prepare Yourself for an Uncertain Economic Future

I’m sure we’re all tired of hearing the COVID-19 pandemic. It’s been over one and a half years of enduring the pandemic, but things might finally be looking better.

However, there are still a lot of uncertainties. Additional unemployment benefits are ended, eviction moratoriums are being lifted, and prices on common goods keep rising. There’s still plenty of uncertainty on how the next few years will shape up.

There’s always going to be some sense of economic uncertainty. If we’ve learned anything over the past dozens of years, global crises seem to just pop up and turn our way of living upside down. Yet, there are some precautions we can to help us prepare for an uncertain economic future. 

Build an emergency fund

Savings matter a lot. If there’s one thing we should all have learned during the pandemic, you need to have a healthy emergency fund

Sure, sometimes you get hit with multiple emergencies, which can wear down your savings, but you still need to have a savings account to reduce the economic damage. You ideally want enough money saved to cover three months’ worth of living expenses. 

In order to build a savings account, you need to find ways to cut or reduce your spending. While it does help to make more money and diversify your income streams, the core root of savings tends to lie in how you spend your money normally.

Cut spending

This is where it helps to live frugally. You should always be looking at ways you can cut or reduce spending

People have a nasty habit of spending money on things they don’t really need. Two big ones are entertainment and eating out. 

Odds are you might be spending more money eating out when you could be cooking at home. The same could be said about entertainment. You might be paying for one or more streaming services you don’t need. 

It’s important to go back and look through your bank statements to figure out where some of your access spendings goes and how you cut back on certain things.  

Learn financial literacy and planning

Learning how to manage your finances is important to whether through uncertain times.

 This goes beyond saving money and cutting expenses. It’s about creating a budget and figuring out how to make the money you have work in your favor in the long run. It’s about finding bank accounts that won’t charge you hidden fees or cheaper health and auto insurance. 

At its core, you need to learn how money works, which can get complicated. It takes time and effort, but gradually you’ll develop the financial literacy you need to weather through times of crisis. 

Develop new skills

In order to make money, you need to have skills that are in demand or profitable. For many, it’s easy to get complacent and do the bare minimum of what it’s expected of us from our regular day jobs. 

You need to update and learn new skills when you can continually. This will help you stay competitive in the job market. The more unique and profitable skills you learn, the better chances you’ll have if you need to get a new job.

Invest in the future

It feels weird to say when you feel uneasy about the future, but it does help to imagine the ideal future you want. 

Do you want to be a homeowner or live in an apartment? Do you plan to get married soon? Do you wish to have kids or have additional ones? These are some questions you need to ask yourself if you haven’t already. 

You need to envision what you need to be doing now to get to the places you want to. If you want to retire by the age of 65, you have to be making regular contributions to a retirement plan. If you have kids or plan to have kids and want to send them to college, start building their college fund now. 

The idea of a stable job and income seems to be more of a myth nowadays, but you shouldn’t despair. There are ways you can weather any financial crisis. It takes serious discipline and planning, though. 

 

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