Cypress Wealth Services
It seems like every day when you open the news, there’s another headline talking about how uncertain today’s times are. From rising inflation rates to crashing stock markets to political and social unrest, we have daily reminders of just how unpredictable life can be.
If all these changes make your head spin, you’re not alone. Lucky, there are some important things you can do to stay grounded in uncertain times. Let’s tackle some smart money moves you can be making, despite what the day’s headlines say.
1. Focus on Your Emergency Fund
The old proverb says: “Prepare the umbrella before it rains.” Building an emergency fund is the same as preparing the umbrella—it’s the foundation of financial preparedness.
Generally, you should have enough money to cover 3-6 months of basic living expenses (mortgage, utilities, groceries, etc.). This money should be held in a highly liquid account, so it’s readily available should an emergency occur. Look for an account that offers a competitive interest rate. You worked hard for that money, now put it to work for you.
If the emergency fund is the umbrella, then budgeting and tracking expenses are the sturdy rain boots you wear when the storm clouds come rolling in. Tracking spending habits can be difficult, especially in trying times, but thankfully there are several apps that will do it for you. Once you have a good idea of where you currently spend money, you can begin to build a budget around where you want your money to go. This can be modified as needed as time goes by and life changes so that you are better prepared to withstand potential fluctuations in income.
Risk management is a great way to safeguard what you’ve already built. Unmanaged risk can mean the difference between maintaining an ample emergency fund or not having enough when you need it the most.
Be sure to review your insurance policies to bring them up to adequate coverage levels. This should include life, health, auto, and homeowners insurance at a minimum, but disability, umbrella liability, and long-term care coverage should be considered as well. These risks are often overlooked and can be devastating to a financial plan.
Making sure you are adequately covered now will save you time, money, and energy in the future.
Investment allocation and risk tolerance are important factors to consider when assessing financial preparedness. If your investment allocation does not align with your risk tolerance, it can lead to unwise investment decisions.
It’s common for people to feel worried when they see their investment values fall during a financial crisis, but a properly diversified investment allocation specifically tailored to your level of risk tolerance can alleviate quite a bit of the stress surrounding market volatility. This helps to keep you invested through the downturns so you can benefit from the potential growth when the market eventually recovers.
In this case, “stay the course” is tried-and-true advice, especially if you have a long time frame before retirement and a sufficient emergency fund to get you through difficult times.
It’s always wise to enlist the help of a professional who can provide objective advice—especially when it comes to something as important as your finances. At Cypress Wealth Services, we specialize in working with high-net-worth families and business owners and understand the unique pressures these individuals might be facing during this time. If you’d like to discuss your financial future, call us at 866.888.6563 or contact one of our offices today. We look forward to hearing from you.
Cypress Wealth Services is an independent RIA firm providing financial planning and investment management to high net worth individuals, families, business owners, and institutions. Cypress Wealth Services comprises professionals with diverse backgrounds and extensive experience and qualifications. Cypress Wealth Services serves a broad range of client needs using their experience and expertise to act as a foundation for their client service process. The firm uses The Second Growth, which focuses on efficiently protecting, growing, and transferring the wealth and legacy a person has already built to their loved ones. With financial advisors in Palm Desert, CA, Tustin, CA, Athens, GA, and Anchorage, AK, the firm serves clients across the country with Wealth Management Services, Fiduciary Services, 401(k) Design and Management, Investment Reporting Services, Financial and Retirement Planning, and more. For more information, visit www.CypressWS.com or call 760.834.7250.