What to Do When You Have Anxiety About the Economy

Minor ups and downs in the economy can be expected, but at times the effects can have a great impact on average people and their families. You may worry about inflation, rising interest rates, getting laid off, or losing some of your hard-earned retirement savings. To ease your concerns, there are several steps you can take.

Keep an Emergency Fund

A good rule of thumb is to have the equivalent of six months of earnings in an accessible savings account. This can give you a cushion if you lose your job or experience an unexpected illness or injury. If six months is too much, aim for as much as you can, so that if your car breaks down or your water heater breaks, you can afford to deal with it.

Start by directing a set amount from each paycheck into a savings account. You may be able to arrange automatic deposits through your payroll system. Then, decide on what truly constitutes an emergency withdrawal. It’s harder to save if you keep dipping into the account for “wants” instead of “needs.”

Invest in Safe Assets

If you’re worried about losing money each time the stock market dips, you might feel more secure investing in safer assets. You can put money into CDs, money market, or I-bonds, which tend to have lower earning rates than stocks but also carry lower risk.

You may also consider investing in tangible assets like property, art, collectibles, jewelry, or precious metals. Buying gold is a timeless investment strategy that can pay off during troubled economic times. Gold tends to increase when the dollar decreases.

Buy an Annuity

If you have cash saved that you’d like to invest, an annuity may be a good option for you, especially if you want to put away money for retirement. An annuity will guarantee you income for the rest of your life.

At times when interest rates drop, you can come out ahead with an annuity since many will guarantee a minimum rate of earnings. There are several types of annuities, so do your research before making a decision.

You work hard for your money, and you want to make sure it’s protected, even during troubled economic times. If you have a low tolerance for risk, there are safer ways to save and invest. Learn about your options, and always diversify.

Check out this article on when you need to hire help with financial planning!

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