How to Protect Your Wealth in the Face of a Global Economic Meltdown! is a question most of us are asking ourselves right now. A few glances at the headlines may have you concerned about just where the world – and not just South Africa – is headed, in financial terms at least. And if you are becoming worried about what your financial situation will look like in a year — or even in a few months — from now, you are not alone.
With all the concerns about economic growth, it’s reasonable to be worried about a potential recession, and one that is on a global scale. A global economic meltdown, to paraphrase some of the more alarmist media outlets.
But the key is to start preparing now so that you’re in the best position with your money, in the event that a recession does hit in the next six to 12 months. Here are some tips for protecting your wealth and remaining in healthier financial shape, no matter what is coming next in the financial world.
How to Protect Your Wealth in the Face of a Global Economic Meltdown!
Build a Bigger Emergency Fund
In a stable economy, experts recommend saving for three to six months’ worth of living expenses. However, in times (like right now) when things are far from stable, and simple things like finding a new job will likely be harder were you to lose yours, the chances are good that you might need to rely on your savings for longer than is the ‘norm’.
Where possible, plan to increase the amount you save now by 5-10%. This may not be as hard as you think. A closer look at your current budget – or making a new one – can almost always help you find ways to save money without cutting your cloth too close.
How to Protect Your Wealth in the Face of a Global Economic Meltdown!
Minimise High-Interest Debt Loads
Call the company that issued your credit card to see if you can lower the interest rates. Consider how you might present a convincing argument; perhaps you have a lengthy history of timely payments or have been a customer of theirs for a long time.
If a rate reduction is not an option, you might want to think about moving your debt to a card with a lower interest rate. Alternatively, you might consolidate your debts to lessen your payments each month and help free up cash that might be required in an emergency.
How to Protect Your Wealth in the Face of a Global Economic Meltdown!
Keep Credit Accounts Active
Now is not the time to panic and cancel your credit cards. The age of your accounts is a factor in your credit score. Even if you transfer balances, keep your credit cards open. Your credit score is important, especially if you need to borrow at some point in the future.
The key is to use your credit accounts minimally. Less than 30% credit usage at any time is the standard advice, but even a 15% usage will help keep your credit score in good shape while helping prevent overspending. And always make your payments on time, as that is another factor when your scores are calculated every month.
How to Protect Your Wealth in the Face of a Global Economic Meltdown!
The Way You Shop at the Supermarket
Anything that is a cost-saving today that you’ll need and use in the future can save you even more money later on, if inflation continues. The best bulk purchases include non-perishable necessities like toilet paper, toothpaste, shampoos, and soaps.
If you always buy fresh fruits and veggies, consider buying frozen ones. Frequently, the foods in the freezer department are healthier, last longer, and cost a lot less. You should also switch to generic brands. Rubbish bags, lightbulbs, paper, cosmetics, shampoos, pet food, canned goods, and other groceries are frequently available for less money and, in most cases, provide essentially the same product, just without the fancier name and packaging.
How to Protect Your Wealth in the Face of a Global Economic Meltdown!
Use Less Petrol
Petrol prices are a global problem right now, and while we are not suggesting you give up using your vehicle (chances are that you can’t), being smarter about the way you use the petrol you do buy can save you more money.
If you could walk somewhere, but usually don’t, out of habit, start a healthy new one and start leaving your car at home whenever you can. If you are shopping or running errands, calculate how you can take on multiple tasks in one outing instead of multiple trips. If there is no-cost delivery on a product you’re buying, opt to order it instead of driving to pick it up.
How to Protect Your Wealth in the Face of a Global Economic Meltdown!
Invest in ‘Recession Proof’ Niches and Industries
If you are doing the sensible thing and using investment as a way to build long-term wealth, don’t stop now. Fear of buying the wrong stock can be mitigated by investing in established, well-known businesses. Investors may want to consider sectors that generally do well in an economic slowdown, such as consumer staples, utilities, and healthcare. And meeting with a financial advisor to help determine where to find these opportunities.
How to Protect Your Wealth in the Face of a Global Economic Meltdown!
Enhance Your Own Market Value
Even if yours is a safe job, for now, a global economic downturn may change that. In a competitive employment market, improving your abilities or furthering your education will increase your marketability. Enroll in classes, attend workshops, or volunteer; the soft and hard skills you gain will shine brightly on your CV.
How to Protect Your Wealth in the Face of a Global Economic Meltdown!
Don’t Panic!
Recessions are not everlasting. You might need to make significant cuts or use your emergency money if your income changes or you lose your job, but you can always make up for it later. The average length of a recession since 1900 is 15 months, and they are usually followed by periods of plenty, so the key really is staying calm, staying sensible, and ‘riding it out.’
For even more information that will help your finances ride out the storm speak to one of our professional consultants. Very often good news can be found in a recession the key is to find it, many people make a lot of money during recessions, find out today how you could too or at the very least protect what you have.
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