World Stock Watch

Taking Control of Your Finances in Uncertain Times

The recent presidential election and subsequent interest rate cut have sent the stock market soaring, but many Americans are still worried about their personal finances. This disconnect between the markets and people’s financial reality is nothing new, and experts warn that it’s essential to focus on what you can control.

Focus on Your Long-Term Financial Plan

Certified financial planner Rianka Dorsainvil advises sticking to your long-term financial plan, only making adjustments when your personal circumstances or goals change. With so much uncertainty surrounding government policies and the economy, it’s crucial to take control of your finances.

5 Ways to Improve Your Finances

1. Build an Emergency Fund: Aim for three to six months of living expenses in a high-yield savings account. This financial buffer provides peace of mind and stability, regardless of broader economic conditions.
2. Maximize Tax-Advantaged Savings: Take advantage of tax breaks offered by traditional and Roth 401(k) plans, as well as Roth IRAs. Contribute to accounts that match your employer’s contributions to get ahead of the game.
3. Optimize Health Insurance and Benefits: During open enrollment, review health insurance coverage options and benefits, including flexible spending accounts and health savings accounts. These tax-advantaged accounts can help you save on health expenses.
4. Tackle Credit Card Debt: Stop using credit cards and work with a nonprofit credit counselor to develop a strategy to pay down your debt. Reducing debt will better position you to adapt to potential changes in interest rates or economic policies.
5. Find “Missing Money”: Search for unclaimed assets from forgotten accounts on the National Association of State Treasurers’ missingmoney.com website or through your state’s unclaimed property office.

Don’t Let Short-Term Market Reactions Scare You

Remember, fundamental financial practices provide a solid foundation to navigate any economic environment. Focus on building a strong financial foundation, and don’t let short-term market reactions or speculative headlines scare you into making decisions that may harm your portfolio or wallet.