It has been almost 10 years of a good economic run in America. The markets have performed exceptionally well, and the economy has been expanding. However, all good runs come to a halt, especially in economic cycles.
At some point, the expansion phase either slows down, stagnates, or crashes due to some factors. In anticipation of that, the future for your money may look a bit bleak.
When the next recession pays the economy a visit, you ought to be ready. Anticipating and planning for it should be done adequately. Preparing for hard economic times is a wise decision.
Economic cycles are like seasons, so instead of panicking just treat them like preparing for winter. It's probably easier to tell when winter is coming than it is to predict a recession. There are telltale signs for hard economic times though, and with that being said; the economic winning streak is almost over.
The stock market is above the lows it hit late last year, and it's about time for you to start
preparing for a possible recession in the near future. Setting your finances right is a good
Practical strategies to do that will come in handy, and what better way than a plan that focuses on reducing debts, putting up an emergency fund and keeping your investments stable in the market for a long time.
As you set you set your master plan in motion, figure out which banks will make your work easier.
Best Banks for an Emergency Fund
Building an emergency plan is a prudent idea for starters. It is likely that at some point in life, you will be hit by some type of crisis. It could be a job loss or your house being swept away by a natural disaster. The one thing that has been recommended, time and time again, is having at least, savings that will persist for about 3 to 6 months when something unfortunate happens.
If you disregard this counsel, it's still better to have something when push comes to shove. Use one of the most common budgeting rules where 50% of your savings goes the necessities, 30% goes to entertainment, relaxation and other luxuries, and 20% ends up in savings.
When searching for a bank to save your money, an online bank should be a priority. A 2019 report that analyzed the best banks for saving found that ordinary banks offer very low interests averaging in the region of 0.08% APY across over 70 banks. If you do a quick comparison, Sally Mae Bank, an online bank offers 2.10 %. This is certainly a high-yield savings account.
Banks That Will Help Lower Your Debt
Begin by getting rid of a high-interest credit card. Apart from saving your finances from high-interest charges, you will safeguard them from risk during times of recession. If you pay your card, make sure that you keep using it to help you get a good credit score. Also, while looking for a bank, look for one that offers flexible personal loans with good rates. Banks that offer opportunities to create new streams of income Even with a good job, it is smart to diversify your streams of income.
Investments like the stock market are not for everyone, especially for the conservative personalities. Finding new ways of generating income should be easy. You can ask your bank if they have accounts or provide services that help you with creating new income.
Certificates of deposit accounts can also be helpful in bringing in some extra income, though older people seem to use them more. These accounts will offer you high APYs. For instance, Barclays 60-month CD can give you up to 3.10%.
There are other ways of coming up with new sources of income. Investing in small businesses can be a great side hustle. Banks like the TD bank is friendly when it comes to small businesses. It also offers SBA loans to borrowers. TD banks have a good reputation in giving small businesses loans in times of need. Such a bank can help you expand and grow your business if you build a good relationship with them.
A recession should no longer send you into despair and depression. You can do more than just surviving it by implementing these strategies.