Planning for financial stability, especially during uncertain political times, has become increasingly important for many Americans. Financial advisors suggest various strategies to navigate this volatile climate. Among these strategies, certified financial planner Forrest Baumhover shows confidence in high-yield savings accounts. He states, "If you feel like things will be turbulent for the next couple of months, but you'd like to invest your money or put it to use after things have settled, then you might be all right shopping around for a high-yield savings account." These accounts provide safety for cash reserves and typically offer higher interest than traditional savings accounts, making them ideal for temporary holds.
Another avenue worth exploring is Certificates of Deposit (CDs). According to Roberto Figueiredo, another certified financial planner, CDs currently yield over 4%, making them appealing for individuals with extra cash. Figueiredo advised, "CDs are the safest option for me." Unlike high-yield savings accounts, the interest rates on CDs are locked for the entire term, providing stability against market fluctuations. With CDs being FDIC-insured, investors can rest easy knowing their funds are backed by federal protections.
While high-yield savings accounts and CDs provide financial safety nets, maintaining a strong emergency fund is also pivotal. Figueiredo mentions, "Putting excess cash... is a good way to protect my finances." He stresses the importance of having at least three to six months of living expenses available for unforeseen circumstances. For those anticipating significant purchases or home renovations, even considering nine months of expenses could safeguard against unexpected financial shifts.
Understanding one's asset allocation has never been more relevant. With new political landscapes, some may feel the urge to adjust their portfolios. Figueiredo suggests evaluating whether current asset allocations align with one’s risk tolerance. He notes, "You don't want to take excessive risk or reduce your portfolio risk when it could significantly impact your financial goals over the long term." This serves as sound advice as individuals look to balance their investments between stocks and safer asset classes.
While it's wise to reassess financial strategies, Figueiredo warns against allowing political anxieties to interfere with long-term investment decisions. Liquidation of assets based on current events can lead to substantial tax consequences, slowing down important financial goals such as retirement. The emphasis should be on remaining invested through market cycles, as history shows time can heal minor fluctuations.
Aside from traditional financial advice, many are turning to side hustles to boost their income, adapting to the modern gig economy. With 25 various side gigs available, everyone can find something suitable to their skills. Freelance writing is one of the top options, allowing individuals to leverage their writing abilities through platforms like Upwork and Fiverr.
Animal lovers can convert their passion for pets to profit through pet-sitting and dog-walking, with services available via Rover and Wag. For those who thrive on creativity, platforms like Etsy can help sell handmade goods, transforming hobbies like crafting or baking directly to cash.
Individuals can also engage minimally invasive forms of earning through online surveys or renting out equipment or space they rarely use. Rather than letting unused assets sit idly, they can be converted to generate some extra cash. This could be anything from renting out cars through Turo to utilizing Airbnb for spare rooms.
Many entrepreneurs opt to offer services like tutoring, either online or locally, taking advantage of their expertise. Another lucrative field is social media management, allowing those adept at engaging online to monetize such skills. Regardless of which hustle one chooses, it is imperative to measure its alignment with your long-term personal financial goals.
Not only does pursuing side hustles allow individuals to supplement their monthly income, but it can also promote personal achievement. It aligns with the broader trend of financial independence, helping to pay off debts, save for ventures like travel, or bolster the emergency fund.
Those motivated to increase their earnings should also be mindful of setting financial targets. Utilizing their side hustles efficiently can lead to consistent savings, which can later be invested. Financial tools, such as apps for automatic savings or investment platforms, can assist users to secure their future.
Combining prudent financial planning and side hustles fosters greater financial health. With sound strategies, individuals can navigate uncertain political climates with confidence and pursue additional revenue streams, achieving their financial goals effectively.
