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- Instead of stressing over a recession, I’m taking my financial advisor’s advice not to panic.
- She tells me to keep my hands off my investments.
- I’m also taking control over my expenses where I can, starting with my utilities.
My grocery bill is where it hurts the most.
Perhaps because it’s a weekly expense, or maybe it’s because if one thing should be affordable, shouldn’t it be food? My research into why my grocery bill has gone up so drastically led me to a fun new term: stagflation. I love words and when I learn a new one, it circles around and around in my head. I’m on week six with this one.
Stagflation describes a period much like the one we’re in, where economic growth is stagnant and inflation continues to increase. This kind of situation often also sees a sharp rise in unemployment. At least we get a fun new hybrid word out of it, right?
Like so many people out there, my knee-jerk reaction to the fear-mongering messaging around the upcoming (current?) recession is to get swept up in the anxiety of it all. I’m a natural worrier (world class) and I’ve had to fight this instinct when it comes to managing my money. I’ve developed tools to help ground myself amid the panic. Here’s how I’m preparing (and not preparing!) for a recession.
Staying the course with my long-term investments
Based on past and present guidance from my independent financial advisor, Liz, at the New School of Finance, I’m leaving my medium-risk, long-term investments on the market, just as they are. Hands off! And, I’m not looking at them more often than I need to. They’re struggling, but my timeline for when I plan to access the funds in these investments gives them time to recover.
Namely, my RRSP (Registered Retirement Savings Plan) and one of my TFSAs (Tax-Free Savings Account) have seen a real dip on the market. I’ve already lost on them and I’m committed to letting them bounce back, rather than pulling the reduced funds and placing them more conservatively. (Note that these specific accounts are only available in Canada, not the US.)
A few weeks after my most recent session with my financial advisor, my dad called to ask …….