In the Media - Don't ‘let fear take the wheel': 3 steps to recession-proof your finances, according to CFPs (CNBC)
- Holzberg Wealth Management
- 5 hours ago
- 3 min read
Our very own Marcus Holzberg, CFP® was recently featured in an article from CNBC. In it, he discusses financial preparation strategies during economic uncertainty.
Recent market volatility and economic signals have many Americans concerned about their financial futures. As Marcus mentions in the article, "It's so easy to let fear take the wheel, completely throw your plan out the window, and make rash decisions when there are perceived worries about a downturn in the stock market or forecasting a recession."
But fear-based financial decision-making rarely leads to positive outcomes. Instead, it is important to focus on what you can control. A good place to start is by revisiting the following three areas:
Build a Robust Emergency Fund
Your emergency savings serve as your financial first line of defense during economic uncertainty. Families should maintain three to six months of expenses in an easily accessible bank account.
Pro tip: When calculating your emergency fund target, consider: the stability of your industry and its sensitivity to economic uncertainty, the job market in your field (as well as the job market overall), the time it would realistically take to find comparable employment, and your essential monthly expenses.
As Marcus shared with CNBC, "Be conservative in your estimate. Provide yourself with a solid safety net."
Optimize Both Spending and Income
Economic uncertainty calls for a two-pronged approach: thoughtful spending review and income protection.
With regard to monitoring your spending, here are some ideas to help prepare for potentially rocky times financially:
Identify discretionary expenses you could quickly eliminate if needed.
Consider proactively reducing certain unnecessary spending habits if job security is a concern.
Prioritize high-interest debt reduction to decrease monthly obligations.
On the income side:
Invest in developing marketable skills in your current field.
Consider diversifying income through appropriate side work.
Strengthen your professional network before you need it.
Maintain Discipline in Your Investments
Market volatility is inevitable during economic uncertainty, as it is the price of admission to the higher returns we expect by investing in the stock market. It is during that volatility that having a sound investment plan is so important, because it deters you from making substantial, emotionally-driven decisions that could have harmful long-term effects on your portfolio.
During times of uncertainty, it is also important to revisit the fundamentals of investing and ensure they align with your portfolio:
Maintain proper diversification across asset classes.
Avoid emotional investment decisions driven by headlines.
Remember that "time in the market is more important than timing the market."
Continue regular investment contributions when possible.
Review your risk tolerance to ensure your portfolio aligns with your comfort level and time horizon.
The Perspective That Matters Most
While headlines will continue to speculate about economic conditions, your financial well-being depends more on personal financial behaviors than macroeconomic trends. By focusing on emergency preparedness, spending discipline, income stability, and investment consistency, you can navigate whatever economic conditions may arise.
To learn more about ways to prepare yourself financially during economic uncertainty, check out the article here in CNBC featuring Marcus Holzberg, CFP®.
If you have questions about your financial plan and working with a financial advisor, check us out. You can schedule a complimentary, no-obligation call with us here!
If you liked this post, please share it with someone who might benefit from it, and let us know if you have any comments or questions!
About the Author
Holzberg Wealth Management is a family-owned and operated financial planning and investment management firm based in Marin County, CA. As your financial advisors, we serve you as a fiduciary and are fee-only, so we never receive commissions of any kind. We help individuals and families like you in the greater San Francisco Bay Area and virtually nationwide with the financial decision-making process to organize, grow, and protect your assets.
** This writing is for informational purposes only. The author and Holzberg Wealth Management do not guarantee or otherwise promise any results that may be obtained from using this report. No reader should make any investment decision without first consulting their financial advisor and conducting their own research and due diligence. These commentaries, analyses, opinions, and recommendations represent the personal and subjective views of the author and do not constitute a recommendation, offer, or solicitation to make any securities transaction. The information provided in this report is obtained from sources that the author believes to be reliable. External links to third parties are being provided for informational purposes only. Holzberg Wealth Management is not affiliated with the third-party websites linked to, unless otherwise explicitly stated, and does not constitute an endorsement or approval by Holzberg Wealth Management of any of the third party’s products, services, or opinions.