Knobull Promotes Financial Well-being Guidance

By: Knobull
 
PROVIDENCE, R.I. - March 17, 2023 - PRLog -- Lynn Bentley, President of Knobull reported, PTSD is rampant from the global financial crisis of 2008. But the numbers today — including recent stock performance — are stronger than they were then."
  • Recent bank woes have made an economic downturn more possible, experts say.
  • If you're worried about how a recession may affect you, advisors say, it's a good time to stress-test your finances.

But it remains to be seen when a recession — defined as two consecutive quarters of negative gross domestic product growth — will happen, if at all.

What the Fed may do is a "toss-up," predicted Raymond James chief economist Eugenio Aleman, noting the central bank has access to much more information on banks than the general public.

According to Morning Consult — 44% of consumers say they are saving more money or building an emergency fund, and 39% say they are cutting back on spending or spending more strategically.

There are a few steps advisors say you should take now to make sure you are prepared to weather a downturn.

1. Stress-test your finances

Much of how a recession may affect you comes down to one thing — whether or not you still have a job. An economic downturn may also create a situation where even those who are still employed earn less.

As such, it's a good idea to evaluate how well you could handle an income drop. While the U.S. economy still has momentum, the recent banking issues may have consequences for employment.

2. Save more cash

As banks' woes have made headlines, one consumer asked whether it would make sense to shift more of their funds to gold.

The answer: No.

But bulking up on emergency cash should be a priority. That way, if you do get laid off, you have enough money to sustain yourself for a period of time without having to do a fire sale.

The upside for conservative investors is they are now able to get higher interest rates on their cash.

3. Reduce your debts

Higher interest rates mean consumer debts are climbing higher. Advisors have said recently they saw a credit card charging a 30% annual percentage rate.

Experts say it may be wise for consumers who feel the pinch under high balances and climbing rates to find a way to renegotiate rates. Better yet, paying those debts down or off completely will help to create financial flexibility in your budget.

Bentley concluded, "Because the advantages of paying those balances directly is limited, instead put the money they would pay toward those debts in a savings account, which can yield 4% interest. Once the payments resume, transfer that money and pay off or pay down that student loan.

For further information, leave a request at the Knobull Contact page for a Financial Literacy Guide."
End
Source:Knobull
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