According to a study, 49% of Americans struggle to save money. This is alarming considering the unexpected changes we’ve lived through in 2020. Now that we’ve experienced a pandemic and see how it has impacted our pockets, how should we prepare for the future? Two years ago, Angela Matthews joined Bold TV to answer that question.
How to survive an economic downturn
Matthews is the founder of Happy Investor Method and according to her, there are a few things to do now in order to prepare for the future. She points out that people don’t start preparing until it is far too late. One thing Matthews advises is the need to save more during these tumultuous times.
What items can be saved on?
It’s best to abandoned luxuries during economic downturns. Streaming services like Hulu and Netflix may fall into those categories. Instead, the money you spend on these services might could be invested in the stock market.
How much should the average American have saved?
Matthews believes that you should save for your next personal life crisis. She does not believe that it is necessary to save enough for nine months’ rent as hopefully, you can pull yourself out of your economic funk prior to that period. Instead, Matthews recommends saving two months of expenses. Another way to prepare for an emergency or economic downturn, according to Matthews, is to start paying off one’s debt.
How to balance FOMO with smart planning
Matthews says that people shouldn’t worry about FOMO when they are trying to save because “think about the FOMO you’ll have when other people are making money during the recession because they know how to invest.” The takeaway seems to be invest when it is sensible. “Doesn’t having property sound so much more fun than going on a vacation every one or two years?”
Where would Matthews buy a vacation house?
Matthews would definitely go for Paris. She wants to open up French stores and enjoy sipping on tea. For David Grasso, a second home in Paris seems like a pipedream for most millennials. “How do we get there?” Grasso asked. Matthews responded that “it absolutely is possible,” and that it is even more so now because you can have your second home work for you. With companies like Airbnb and side hustling, side homes can become a main revenue stream.
The average investor
During periods of economic downturns, it’s important to get your credit up because you will want support from banks. You are also going to want to start learning how to invest in the stock market now so that when those amazing deals come after the recession, you don’t make foolish rookie mistakes about what to buy and what not to buy. Even if you are starting to invest while the market is getting higher and higher, you can invest in stocks that pay dividends and find stocks that cost less than $20. People think that investing has to be this big, grand thing, but in reality, to you can buy stocks for $20 or less.
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