What is “Savoring” and How Can it Help You Build Wealth?
Have you noticed the price of…well everything…going up? By now, you have probably heard that the Russian invasion of Ukraine will likely raise the cost of gas, food, and other products even further. The reason for this is that both Russia and Ukraine are major producers of gas, oil, wheat and corn. While your primary concern is likely ensuring that the people directly impacted by these events are okay, you are probably also wondering how it will affect your finances. So, what should you be doing with your money? Well, first, don’t panic. Here are 3 solutions to changing economic conditions.
In response to inflation, the Fed may raise interest rates. This means that it will cost more to borrow money. If you are in the market to purchase a home or car, you may notice that the interest rates to borrow money are higher than they previously were. To combat this, make sure that you are in a financial position to handle any additional debt you need to take on. Ensure that you have 3- 6 months of living expenses set aside in a FDIC insured account that can carry you through any setbacks before taking on extra debt.
Pro-tip: Higher credit scores give you more room to negotiate on interest rates. If you absolutely need to take on more debt, consider increasing your credit score if it is not over 740.
The financial markets are always volatile. However, sometimes they can be more volatile than they are at other times. World events and political turmoil often have an impact since people panic and end up selling their stock. Try to remain calm and maintain a long-term perspective. Over the long term, stocks have historically come back and maintained their value. Don’t get caught up in the hype of trying to predict when the market will fall to its lowest. Instead, check your accounts to ensure that you are properly diversified and well invested.
Rising prices are tough for everyone. There is no easy answer to inflation other than to consider what you absolutely need to have. If it is possible to drive less, you should consider doing so. Planning for meals can help at the grocery store. Download the Snowball Budget tracker to ensure that you are considering all areas that make it possible to save money.
Pro-tip: One major downside to inflation is that it makes your money less valuable. In tough times, it can be hard to find a balance between saving money and investing it. After you have set aside a sufficient emergency fund, consider investing the rest of your money to get more return .
If you are in a position to help support the people of Ukraine, here are some organizations that you can help support.
Anna Paul, CFP® is an Investment Adviser and Certified Financial Planner. She currently serves as money coach for Snowball Wealth providing personalized financial guidance in areas such as budgeting, building and maintaining credit, estate planning, debt management, and money mindset. Most importantly, she believes in coaching clients to adapt their mindset to their goals. She specializes in helping individuals identify financial goals and take actionable steps towards achieving them. Anna volunteers with Carolina Youth Coalition as a mentor and serves on the Volunteer Income Tax Association. When she isn’t giving financial education presentations, she can be found hiking, couponing, or trying new recipes.