The US Federal Reserve, European Central Bank and Bank of England all continue to hike their benchmark interest rates. Whilst this has been expected, it doesn’t take away from the financial strain being felt by households.
As economies across the globe face possible recession, Adrian Starr, Director and Wealth Manager at Peregrine Wealth Limited, provides three personal financial survival tactics to stick to whatever your financial circumstances.
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Remain as financially liquid as possible
As a rule of thumb, it’s advisable that you set aside at least twice your monthly expenses in savings, as a backup for unforeseen circumstances, such as job loss, increased bills or emergencies. For the same reason any investments should be reasonably liquid so monies can be raised quickly if ever required.
It’s not only important to save for yourself, but also to teach your children about the value of saving. Children learn their spending patterns from their parents, so encouraging children to develop healthy savings habits at an early age can help them better manage their finances in the future.
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Don’t take on new debt if you can avoid it
With the cost of living expected to surge over the next year or two, it is not advisable to incur debt for unnecessary luxuries. It’s difficult to predict the duration of high-interest rates, and maintaining interest payments may require you to access your emergency funds or liquidate investments.
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Stick to your long-term investment plan
In the midst of market volatility, it’s important not to be rattled. Instead, stay committed to your long-term investment strategy and hold tight through short-term market volatility. Retaining your investments, assets, and savings is key during times of market fluctuation. Remember that financial markets are constantly cycling through ups and downs, so it’s best to keep calm and stay the course.
It’s essential to apply the lessons we’ve learned from previous recessionary periods. Cash is king during times of uncertainty, and it is also wise to avoid radical financial decisions and unnecessary debt. Keep in mind that market volatility will be temporary, and by hanging in there and remaining focused on your long-term financial goals, you can navigate your way through the year ahead.
If you would like some financial guidance to provide a route through the turbulence, contact Adrian at adrian@peregrine.gg
