How to thrive in uncertain times The statistician and risk analyst Nassim Taleb said “history doesn’t crawl; it leaps.” The last few months sure feel like a leap.
from your checking account, so you don’t risk overspending in your checking account and borrowing from your own emergency savings.
I am not going to show any graphs or charts today. As the global economy has slowed, and as the stock market has declined, and our favorite small businesses have closed for the greater good, it can be scary to look at retirement account statements and to think about the financial future.
Do a spending audit. Do you know what your monthly spending has been? If not, pull out the former month’s bank statements and credit card statements, and go through all the spending items and categories. What in your current spending is discretionary that you might cut back on?
And lastly, different questions get you different answers. In times of volatility humans naturally rush to drastic conclusions and to ask less-than-helpful questions (i.e., how much worse is this going to get?). Pivot here, and ask yourself questions that can help you thrive during this time of uncertainty: How can I use this to gain long-term advantage? How does this change my next year? How confident do you feel that you can positively impact your financial future? How clear are you about your financial plan and priorities? What is most important to you? Use this time to write down how you are feeling, and how you’d like to feel about your finances in the future. In the last two centuries of American business, down markets have been followed by up markets. If you can be patient and use this as a time period to focus on what financial health and
freedom look like for you, you can turn this challenging period into a productive, positive financial event in your life. Prime yourself to seize opportunities that will emerge from the turbulence and maximize your financial wellness as the dark clouds disperse. Kimberly Shappee is First Vice President and a Financial Advisor with RBC Wealth management in Missoula. Investment and insurance products offered through RBC Wealth Management are not insured by the FDIC or any other federal government agency, are not deposits or other obligations of, or guaranteed by, a bank or any bank affiliate, and are subject to investment risks, including possible loss of the principal amount invested. . RBC Wealth Management, a division of RBC Capital Markets, LLC, Member NYSE/FINRA/SIPC
BEN ALLAN SMITH, Missoulian
Look at refinancing any Our brains are designed debt you have. The Federal towards preservation, and in Reserve’s recent rate cut may these moments of pain and mean that you could obtain anxiety, our natural fight a better interest rate on your or flight instinct kicks in. loans. First you need to know Emotional financial decision KIMBERLY R. your current interest rates and making has historically led SHAPPEE terms. Next look at what you humans to do the opposite of Financial Advisor might be able to obtain if you what would have been best for were to refinance, add the cost their finances. Knowing this: RBC Wealth to refinance, and decide if the I urge you to pause. Avoid Management benefit is worth the instinct of trying to catch the cost. That’s a falling knife. Take a breath. your “breakReclaim your body and your mind from even”: how many months all the news and fear, and let’s focus on of the lower payments it what you can control. takes to cover the cost of First up: Revisit your personal rule on refinancing. emergency savings. If you are feeling at Is now a good time to all uncomfortable with your emergency pursue additional education cash on hand situation, consider setting to help improve your aside time to do the math and setting resume or general skills? a rule for yourself or your family and With so many educational using this as both a lesson and a goal options online and many for working towards that number in people on self-quarantine, the future. Doing the math means now could be a perfect looking at your monthly expenses, and time to take advantage of deciding a prudent number of months #CoronaUniversity. of backup that you need for yourself or your family, and then multiplying Have you been wanting your monthly spending number, say to start a side hustle? Now $3,000, by the number of months you may be a wonderful time have decided to have as backup, for to write out the business example, 9 months, and $27,000 would plan and get started. Many be your target emergency savings account of the best business models balance. Emergency savings should be were built during the last kept in cash (versus invested in anything recession, out of a period that could possibly change in value, i.e. when there were problems a stock or even a bond). It’s also best that needed solving and practice for this account to be separate people had a bit more
time to tinker and execute on those opportunities.
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