The New Financial Normal: Are You Prepared?

There’s been a lot of recent hand-wringing over what appears to be a more permanent shift in American views toward the economy.  More persistent unemployment and concerns over future earnings has more households saving, staying home, and renting over owning.  However, is this such a bad thing? While obviously it is better to have a robust employment market, other aspects of shifts in financial behavior seem to be healthier and bode for more resiliency in the face of future adversity.  If, as the article implies, leaner times are here for longer than expected, are you prepared?

--Have you continued to keep your skillset up-to-date in case of employment concerns – one of the biggest surprises for many people is the lack of job security that the current marketplace has exhibited.  Unfortunately, I don’t see this as a temporary issue, but rather as a permanent shift in the way company’s treat their workers.  Part-time employment, contract employment, periods of time between jobs appear to be here to stay. To keep on top of this, the best thing is to maintain a continually upgraded set of skills, even if comfortably employed.  HTML skills, language skills, and additional certifications continue to be valuable.

–Are you optimizing your savings — establishing an emergency fund, saving each month, and putting away money for retirement is absolutely wonderful.  Be sure you are optimizing the savings through smart (and not overly complicated) investment strategies, interest bearing accounts, and taking advantage of the wealth of information out there on risk diversification and savings.

–Have you cultivated a set of hobbies that are not cash drains — with staycations more popular and people spending less on eating out or on expensive purchases, there’s a risk that the new lifestyle starts to become a chore.  Explore new hobbies and activities and find new interests.  Most communities have a public library and community center with activities, volunteer opportunities, maps for trailwalking, and lots of other things that are good for your wallet. Remember to have some fun as well.

shared at this week’s Carnival of Personal Finance