In the last few months, people have experienced a variety of economic struggles. From skyrocketing unemployment rates to the bankruptcy of thousands of businesses, 2020 has been a year of financial hardship. Throughout periods of economic uncertainty, it can be difficult to determine how to manage your money well. There are many wise financial decisions that you can make in times of crisis. In this article, we will discuss three ways that you can continue to handle your money well in spite of economic instability.
1: Be Frugal
When times are uncertain, it is important to be cautious about spending money in excess. If there are ways you can cut back, do it. This economic recession is being felt by nations across the globe. Below are a few simple tricks for saving cash:
- Go through your current subscription services. Cut off any services you do not use regularly. (music streaming, tv streaming, amazon delivery, cable, etc)
- Keep a tight budget. Make sure that every purchase you make is calculated in the overall budget.
- If you are looking for assistance with your budget, consider downloading a budgeting app (YNAB, Everydollar, Simplifi, GoodBudget)
- Make food at home. You can save a ton of money by making your own coffee and creating your own meals. When cooking at home, you greatly reduce the amount of money you spend through dining out.
- Resell products that you do not use. If you have clothes and gadgets that haven’t been used in months, consider selling them online.
If you are currently financially stable, it is important that you are prepared for any changes or unexpected circumstances that occur in the future. By diligently budgeting and saving your money, you are likely to remain stable in times of uncertainty.
2: Invest Wisely
Even though many companies are struggling, there are some that are continuing to thrive. If you are able to continue investing, look into stable long-term dividend stocks to buy and hold. Companies that are stable within this economic climate are likely to remain stable for years to come. The companies that are continuing to grow will likely be able to maintain their success. When purchasing stocks, be sure to consider the longevity of success for each business you are assessing. Some signs of a healthy stock include:
- Ability to withstand tough economic conditions
- Reasonable pricing
- Competitive advantage
When investing, it is important to diversify your portfolio. When your portfolio is diversified, risk is mitigated. When you are looking to diversify, it is important to make the following considerations:
- Vary the size of the companies you invest in
- Invest in companies across different industries
- Own mutual funds and exchange traded funds
- Time your investments correctly
When diversifying your portfolio, it is important to know when to buy and when to sell. Don’t hold on to stocks that are not displaying any success. By investing wisely when the market is struggling, you will experience greater benefits as the economy regains strength.
3: Give Back
Not only is charitable giving meaningful to your community, it benefits your personal and professional reputation. Giving back to philanthropic groups help to support the wellness of your community at large. By giving back locally, you are investing in the future success of the city you live in. Local nonprofits help support the flourishing and growth of entire towns and cities. In addition to supporting a meaningful cause, the donations you make to nonprofit organizations are tax deductible! If you need a tax break this year, charitable gifts will help you to reach your goals.
Times of economic uncertainty are stressful for everyone. Although the market is not stable, there are ways that you can be prepared for the potential financial challenges that will come your way. Through charitable giving and investing, you are becoming prepared for financial stability and growth in the years ahead. You will be equipped to handle emergency situations when you practice spending money wisely, budgeting, and saving. Take the time to assess your finances and establish your game plan for the future.
*** SPECIAL ALERT — July 25, 2020 — TWO of this Year’s Motley Fool Stock Picks Have Already Tripled and Two have Doubled! ****
We have been tracking ALL of the Motley Fool stock picks since January 2016. That’s 4+ years, 54 months and 108 stock picks. As of Friday, July 24th 2 of their 12 2020 stocks picks have already tripled (TSLA, SHOP). In addition, 4 of their 2019, 8 of their 2018, 7 of their 2016 and 10 of their 2016 picks have also doubled. Best of all, over these 54 months, the average stock pick is up 111%. That beats the SP500 by an average of 87%. And that’s even accounting for all of this COVID mess that has wreaked havoc on some stocks but presented opportunity for other stocks. THAT is how the Fool does so well!
- Shopify (SHOP) – April 2, 2020 pick and it is already up 163%
- Zoom Video (ZM) – March 19, 2020 pick and it is already up 107%
- DexCom (DXCM) picked Feb 20, 2020 right before the market crashed and it is still up 26%
- Tesla (TSLA) picked January 2, 2020 before the crash and it is up 123% compared to the SP500 -7% so it is ahead of the market by 130%
- HubSpot (HUBS) picked December 5, 2019 and it is up 46%
- Netflix (NFLX) picked November 21, 2019 and it is up 42%
- Trade Desk (TTD) picked November 11, 2019 and up 111%
- Zoom Video originally picked Oct 3 and it is up 234%
- SolarEdge (SEDG) picked September 19, 2019 and it is up 44%
Now, no one can guarantee that their next picks will be as strong, but our 4.5 years of experience has been super-profitable. They also claim that since inception, their average pick is up 424% and now we believe them. You sure don’t want to risk missing out. Many analysts are saying that we have passed the bottom of this COVID crisis and stocks will recover quickly. So make sure you have the best stocks in your portfolio.
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(before it’s too late)