So first thing’s first, I’m not the fear-mongering type. I personally really hate it when pundits prey on people’s worst instincts. But there is, unfortunately, something to be said for financial forecasting, right? It’s more (at least somewhat) more science-based, and less I’ve-got-a-feeling-something-bad-is-gonna-happen. There are patterns and signs for what’s to come, and we know this because we, as in our country, tend to fall into these patterns again and again.
Pay off all credit card debt
Regardless of how much credit card debt you have at the moment, it should be your number one priority to pay off. And do it somewhat aggressively. Ideally, you shouldn’t be carrying a balance over month-to-month, but realistically, it’s bound to happen to some of us, especially if a big purchase was made. After paying off your debt, treat your credit cards as a debit card, in that you have the actual cash to pay off what you’re buying on your credit card.
It’s a basic rule of thumb to have three to six months’ worth of living expenses saved up. The idea is that it will cushion you if you lose your job, and won’t have to tap into your retirement savings. It’s hard to see the other side of an economic crisis, but when you have that cushioning, and your finances are intact, getting back to normal will come easier.
Find a financial planner
Ask your friends, family, or read all the reviews and testimonials you can, and interview prospective retirement financial planners. Essentially, find someone you would trust with the keys to your house. Work with your adviser to create a customized financial plan that meets your specific needs. That will determine your asset allocation. Make sure you have a diversified portfolio containing assets that hedge against each other.