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Chris Douglas says the sluggish economy is harming personal finances, but offers there are moves you can make to improve your financial situation.
“It’s tough the way things are going,” the University of Michigan-Flint associate economics professor said. “All terminology aside, we’re in a slowdown.”
Inflation lingers near its recent 40-year high. The University of Michigan's index of consumer sentiment isn’t far above its 70-year history’s lowest point hit last summer.
“When there’s a slowdown, you want to be able to get through it,” Douglas said. “Up your savings and reduce your consumption.”
He offers these suggestions:
- Set aside money for an emergency fund.
- Delay major projects or purchases, such as a new vehicle, roof, home improvement, or other need, unless absolutely necessary.
- Live within your means, don’t overextend yourself, and “don’t overdo it on credit cards or dip into your nest egg.”
- Make sure your asset balance is appropriate and check in with a financial planner.
“You’ve got to up your savings, however you can,” Douglas said. “Your paycheck just isn’t going as far as it used to.”
He advises:
- Save and put aside as much as possible for retirement.
- Check in regularly with your financial planner. “You go to the doctor once a year. You should have the same philosophy for your retirement savings.”
- Speak with family and friends about who helps them and what they do.
“My No. 1 piece of advice is start early or start now. It’s never too early nor too late,” he said. “I’m halfway to retirement, and it feels like l just started a couple years ago.”
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