There’s no doubt about it. Anyone who’s slightly aware of the news is hearing that things aren’t good, that we’re heading into a recession, that inflation is climbing, and all other manner of negative stuff about personal finance.
You know what I want you to do about it? I want you to take things one day at a time.
If I’ve learned anything during my few decades on this little blue ball we call home, it is this. No one knows what tomorrow will bring. People will guess and predict and estimate and prognosticate. They will do all kinds of worrying about all kinds of stuff. And you know what?
The future unfolds one date at a time, for everyone. There is no way to be 100% certain about what will and what won’t happen at any given moment. So do yourself a favour and don’t even try.
Instead, focus on what you can control. Do what you can then go about the business of living your life.
Top Up the Emergency Fund
At the very absolute least, have $100 in your emergency fund. It’s certainly not enough but it’s better than nothing. Squirrel away every extra nickel you have into your emergency fund until you have one month’s worth of expenses in there.
Oh, you have that much already? Okay – then your goal is to get yourself to two months’ worth of expenses. I want you to increase your emergency fund until you have one year’s worth of expenses ready to be deployed in the event of a true emergency.
When the emergency hits, you will be very pleased that Yesterday You had the foresight and brains to set something aside. Whatever your emergency winds up being, adding debt to the situation will likely not make it better.
Don’t Stop Investing
If you’ve been following my advice for any length of time, then you have an automatic transfer in place to whisk part of your paycheque from your chequing account to your investment account. You then invest that money into an equity-based exchange-traded fund for long-term growth. You’re doing this month-in-and-month-out, while ignoring the Talking Heads of the Media.
I want you to continue doing this. Look. The economic cycle has its ups and downs. Right now, we’re in – or heading towards – a bottom. For you and me, that means everything is on sale. It’s good to buy things when they are on sale. And due to very fact that the economic cycle is a cycle, the value of the equities – aka: the stock market – is going to go back up.
For those of you who haven’t started investing, start today. Set up your automatic transfer. Pick an ETF or index fund that invests in equities. Invest your money on a consistent basis. Set up a dividend re-investment plan – aka: DRIP – so that your dividends and capital gains are automatically re-invested. Ignore the Talking Heads and go about the business of living your life in the way that makes you happiest.
Spend Consciously
It’s your money so you get to spend it however you want.
That said, might I suggest that you only spend on things that bring you the most joy?
I’ll use myself as an example. At one point, I had 4 streaming services. I was considering adding a fifth when I stopped to ask myself if I was really loving having the initial four. The answer was “No”. Sure, I watched all of them at random times but I could go weeks without watching atleast one. So I cancelled the one that brought me the least amount of quality entertainment.
You see – I was spending to spend and not because that fourth streaming service adding something extra special to my life.
Look at where you’re spending your money. Unless every nickel spent is making your life better, consider cutting some expenses and seeing how it goes. After all, the beauty of our capitalist system is that they will always take your money at some point if you decide to give it to them again. By “them”, I do specifically mean anyone who is currently taking your hard-earned money and giving you a product or service.
Live in the Present
Like I said at the beginning, no one knows what the future will bring. The economy will recover, but I can’t tell you exactly when. Neither can anyone else. And I’m fairly certain that you will sleep easier knowing there’s a cushion of cash waiting for you in case you need it.
Do what you can do then live your life. Spend time with those who renew your soul. Do something creative. Read a book – better yet, write a book! Do your hobby, or start a new one. Talk to someone new. Visit a park or a garden to spend time in nature. Put down your phone & shut off the computer or tablet. Sit quietly for 10 minutes. Take a nap.
Listening to the Talking Heads will not calm your nerves. Their job is to get ratings, not to be right. If you can, rerun the tapes from 6 months ago and see who – if anyone – had correctly predicted every single thing that’s happening today. None of them accomplished this impossible feat! If they couldn’t do it 6 months ago, then it’s highly likely that they still can’t do it today.
There’s no benefit to worrying, or fretting, or considering endless what-if scenarios. Worrying and fretting changes nothing. There will always be a what-if that you didn’t contemplate. Taking the actions that I’ve articulated above will put you in the best position to survive – financially – whatever tomorrow will bring.
At most, you control your choice to live below your means and to invest for the future. Once you’ve chosen to do so, then your next best step is to take things one day at a time.