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Nikita Trainin

Nikita Trainin

Financial Adviser

6 Ways to Manage Economic Uncertainties in Your Life

I believe we can learn a lot from Sir Winston Churchill, who said, “Let our advanced WORRYING become advanced THINKING and PLANNING. ” History shows that Winston Churchill was not a stranger to the most difficult challenges as he became famous for uniting and leading the British people to victory over the Germans. Source: https://www.britannica.com/biography/Winston-Churchill.

We can learn from him as we are all being challenged by economic instability in our country and geo-political instability in the world.

The constant news and articles, screaming at us daily regarding high inflation, the rise of interest rates, numerous supply chain problems, and the prices of fuel and groceries rising. Besides that, we’re aware that since NZ is part of the global economy, our economy relies on how well global commodities and the stock market are doing, which has been quite volatile.

“We live in unpredictable times,” says Chief Economist Scott Anderson. Source: https://meansandmatters.bankofthewest.com.

It affects us all, whether we have a job or business, whether we have a house or rent and whether we are single or married with kids. Simply speaking, the times are WORRYING but we can help ourselves by THINKING about ways to manage what we can and PLANNING how we can manage them.

Here are 6 ways we can do to manage these stresses:

1.Review your expenses and make adjustments if necessary

The first step to managing economic uncertainties is to take a close look at our expenses and see where we can cut back, if necessary. For example, we may want to limit our eating-out budget or reduce our spending on shopping and entertainment.

Check any online monthly subscriptions, which may not be needed or used. I remember when I reviewed my expenses, I managed to save $600 per year just by cancelling monthly payments of the online subscriptions which I no longer needed. Knowing where our money is going will help us make informed decisions about where we can cut back if needed.

2. Build up your emergency savings

It’s always a good idea to have a buffer in the form of savings that we can fall back on in case of tough times financially. If we don’t have much savings, now is a good time to start building them up. You can start small by setting aside a fixed amount each month into a savings account.

3. Invest in quality assets that can appreciate over long term such as property or shares

Another way to weather economic uncertainties is to invest in assets that have the potential to go up in value over time such as property or shares. These types of investments can provide a source of income during tough times as well as long-term capital gains when the economy eventually recovers.

4 . Limit your borrowing

If you are carrying a lot of debt, it can be difficult to weather an economic downturn as your regular repayments become unaffordable. Therefore, it’s important to limit your borrowing and only take on debt that you are confident you will be able to repay even if there are tough times ahead economically. Using credit wisely will help you keep control of your finances during uncertain times.

5 . Diversify your sources of income

If all your eggs are in one basket, we could be in for a nasty shock if that source of income dries up during an economic downturn. Therefore, it’s important to diversify our sources of income to have more than one stream coming in . This could include things like having a paid job, running a business, and investing. By having multiple streams of income, you’ll be better placed to weather any economic storms that come your way.

6.  Plan for worst-case scenarios

If we take the time to plan for a financial emergency, it may help alleviate some stress during unpredictable economic times. While we can’t control the world economy, we can still control our spending attitudes. Planning for the unplanned can save you a lot of stress down the line.

For example, if we were to lose our job or source of income, what would we do? It might be helpful to look into what benefits we could qualify for, like redundancy pay or income protection insurance. https://niktrainin.co.nz/home-page/#insurance1

When planning for the worst that could happen, we increase our chances of success by having a solid Plan B. The economy is constantly changing, and there will always be periods of growth and decline. It is a normal cycle.

To help you weather economic storms, feel free to get in touch with me. https://niktrainin.co.nz/get-in-touch/

As qualified financial adviser, I can help you make informed financial decisions so you can plan for your future.

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