Perhaps you’ve been worrying about a pending recession for some time now. If you’re on the verge of retirement, you might be anxious about how changes in the market could affect your portfolio and alter your plans. These tips will help you protect your finances, adjust your budget, and soothe your anxiety about the economy.
Refinance Your Home
Depending on your current mortgage interest rate, you may be able to lower your rate by refinancing. Refinancing your mortgage can save you a substantial amount of money each month and over the life of your entire loan. If you’re interested in refinancing, you’ll need to get in touch with your lender to start the process.
Think about using the money you save on your mortgage to invest in a home warranty. You may have considered whether they were worth the price in the past, but you certainly don’t want to pay large expenses out of pocket should something at home need repairs or replacement during a recession. You’ll find that home warranties can cover up to 23 essential home systems, helping you rest easier during times of economic uncertainty.
Make Wise Purchases
In the face of a possible recession, it’s important to cut back on unnecessary spending. Go over your budget and identify any areas where you could reduce your spending. Sofi recommends walking or biking to work if possible, getting rid of cable, and cooking at home rather than going out to eat.
Before you make a big purchase, make sure to read lots of reviews and ratings first. It’s easy to be overwhelmed by the selection of home products available. You don’t want to waste money on products that won’t last.
Adjust Your Portfolio
As you inch closer to retirement, you need to make sure that your portfolio has been properly allocated with a diverse range of sound investments. This is a good time to connect with a reputable financial advisor who specializes in helping seniors get ready for retirement. If you’re wondering how your assets should be allocated as you approach your ideal retirement deadline, Smart Asset states that the majority of your portfolio should consist of fixed-income investments, such as high-grade bonds. It’s also important to maintain a sizable emergency fund in cash.
Focus on Your Mental Health
Finally, you also need to prioritize your mental health to cope with a possible recession. Reading up on financial news day in and day out may not be helping your mindset - while it’s important to stay informed, you don’t want to cause yourself unnecessary stress. Try to make time for healthy, low-cost hobbies, such as yoga, reading, and simply spending time with your loved ones. Very Well Mind also recommends writing in a journal. When you see your worries written down on paper, you might find that you have less to fear than you think - it’s easier to work out solutions when you gain some clarity around the problems at hand.
Work From Home to Reduce Stress
Working from home has become increasingly popular in recent years, and there are many benefits to this arrangement. One of the most significant advantages is that it can help to reduce stress levels. When employees have to commute to an office, they often face traffic congestion and long hours stuck in a cubicle. This can lead to high levels of stress, which can have negative impacts on both physical and mental health. However, when workers are able to make their own schedule and work from the comfort of their own homes, they often find that their stress levels decrease. In addition, working from home can also give employees a greater sense of control over their work-life balance, which can further reduce stress levels.
Dealing with a recession as you try to plan for retirement can feel daunting. By setting a reasonable budget, refinancing, diversifying your portfolio, and finding ways to improve your mental health, you can deal with the changes ahead. By making smart financial plans, you’ll be able to cope with any economic climate. While reviewing your financial decisions, also spend the time to review your estate plan, as well.