10 Ways To Grow Financially During Tough Times

10 Ways To Grow Financially During Tough Times

The current state of the international economy means that, right now, increasing your wealth may be challenging. The 2022 annual inflation is forecast to hit 7.7%, according to a recent Economics Experts Survey (EES), meaning the value of people’s financial assets may shrink. When economic conditions look poor, often doom and gloom surround the markets due to the impact on people’s earnings and employment, hurting overall financial confidence across the board.

In this article, we will outline how you can protect and grow your money, despite the conditions of the economy. We will also explore how good planning can help you avoid monetary difficulties, whatever your circumstances are.

1. Create a household budget

Make sure that you take a detailed look at your everyday outgoings. It can be helpful to make a list of your regular and necessary bills by looking at your bank statements and using this information as a foundation for your household budget. Creating a spreadsheet is a good idea, too; it can help you track what bills you need to pay and what bills are non-essential easily, and it can also help you create saving targets. While doing this, it is essential to factor in that emergency spending may also be necessary; therefore, it’s best to put money aside for unforeseen circumstances.

2. Try to develop a savings habit

Take a serious look at what you can afford to save each month, then try not to deviate from that. Being unable to spend money on certain items during the pandemic may have aided you in highlighting the best belt-tightening measures. Therefore it could be a case of just picking up a savings habit that you already had, making the task easier. Impulse buys are something that should be avoided as much as possible. The age old saying to ‘sleep on it’ before making large purchases is also wise, as you might benefit from a new perspective the next day. These small tactics will hopefully help you stick to a savings habit if you wish to cultivate one.

3. Pay off your debts

You could be paying more interest on your debts than the money you are saving through being frugal. It makes sense to try and solve debts with high-interest rates first; credit cards are often the main culprit here. It can be prudent to move any debt you have onto a card with a 0% rate for transfers, though there might be fees involved when doing this. Therefore it’s essential to check whether the cost of taking this action is worth it.

4. Make sure you’re protected

Ensuring that you and your family are safe and won’t be affected by any financial issues means that sometimes just focusing on your savings and spending won’t be enough. Unfortunately, it can be necessary to consider your health to ensure that your family is protected if you unexpectedly fall ill or pass away.

If this possibility concerns you, different types of financial protection can give you peace of mind, such as critical illness and life cover. Before you pursue this path, it’s a good idea to speak to a qualified financial advisor, as they can aid you in figuring out what the correct level of benefits and cover is best for your particular situation.

5. Continue to invest, or start doing it

Continuous periods of economic confusion and trouble can create uncertainty. However, if your financial situation means that you have no need to spend money urgently and you have enough reserved for any unforeseen issues – investing could be an intelligent decision.

Of course, stock markets will rise and fall. If we look at history, a pattern emerges: shares in the stock market over a long period often perform better than cash. It tends to make sense to invest your money if you can, compared to holding onto it and letting inflation diminish its value. Regardless of current economic conditions, stock markets still offer an excellent opportunity for increasing your wealth.

6. Remain calm while investing

When markets inevitably fall, there can often be a quick reactionary desire to start selling your investments. We recommend that you try and avoid making rash decisions, depending on the price you entered the market, you could confirm your losses by selling as soon as they start dropping in value.

It might be wiser to stay patient, incur losses at first, but then wait for the recovery and make up what you initially lost. Market volatility will always be a reality, especially in uncertain economic times. Therefore it’s wise to focus on the long game and try to get past these unavoidable pitfalls that occur in the markets.

7. Don’t pay over the odds for advice

Investment platforms charge fees for handling your finances, as do financial advisors; therefore, you mustn’t pay too much for investment advice. The costs of various investment platforms are different, and you could probably save by changing to a new platform, or advsior, that offers you better value.

You can find out more about our transparent platform costs here: https://www.brite-advisors.com/about-us/our-fees/

8. Spread the risks by diversifying

A vital part of a reasonable investment strategy is diversification, and you should always hold a healthy mixture of assets. By diversifying, you can ensure that you are not keeping your eggs in one basket, particularly if one part of the global economy gets affected harder. Limiting your exposure is one of the critical aspects of sound investing.

9. Invest wisely

If you’re looking at putting your money directly into shares, investing in companies with a healthy business model and balance sheet is a good idea. Often these companies are firms whose sales don’t fluctuate as the demand for their product is unresponsive to broader economic conditions – investing wisely in sectors that, no matter the economic climate, continue to succeed is a sound strategy.

10. Let the past reassure you

According to a Barclays Equity study shares still deliver more significant returns than regular cash deposits in 76% of all five-year periods since the beginning of the 20th century. Sometimes the line goes down, but it goes back up too.

Growing financially during tough times is achievable despite the challenges presented. We recommend you start by getting the right financial advice. Talk to us about all your investment needs, so we can ensure that you can still be on the right financial path even if economic conditions are less than ideal.

Contact Brite Advisors here: https://www.brite-advisors.com/contact/

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