Is it time to P.A.N.I.C.?
It's nearly impossible to go without hearing bad economic news these days.
You've heard about, and felt, the effects of inflation. Gas, groceries, travel ... it's all more expensive than ever and there are so many questions swirling around in your head. Is the economy going to shrink? Is the housing market going to collapse? Is now the time to P.A.N.I.C.?
Good news. BCU is here every step of the way, and there are actionable steps you can take to secure your financial well-being. Follow these P.A.N.I.C. steps so you don't get to a point where you might actually panic.
The P.A.N.I.C. steps to avoid panic
1. Pare down your inventory.
Given that price tags are at an all-time-high, now is a great time to convert the things you're not using into cash and free up space at the same time by selling what you don't need on sites like eBay or Facebook Marketplace. Some people are selling cars and even downsizing houses because of the strong prices, and those working remotely are finding that they can live with fewer vehicles or move to a cheaper or more ideal location.
2. Adjust the budget.
You should review your spending in detail once a year and identify opportunities to save some money. Can you cancel streaming services, shop around your insurance, or eat out less often? There are many ideas, but now might be a great time to complete your review.
3. Neutralize your debt.
Almost everyone has some sort of debt. Most of the time, we've got it under control - payments are being made on time, and everything is happy-go-lucky. But what if income starts to fluctuate, even briefly? If we fall behind, it can be hard to catch up. To give yourself more breathing room, take a look at your smallest debt. Is it something that you could focus on and pay down over the next few months? This could free up cash flow and build confidence heading into the future.
4. Increase your available cash.
Establishing and maintaining an emergency savings can mean the difference between being prepared or panicked when things get uncertain. You've probably heard the phrase, "cash is king." It's particularly true when cash is hard to come by. Along with paring down your inventory, converting some of your unused trinkets into cash can help you ride out a storm. Plus, it could put you in a position to take advantage of deals or reinvest the money later.
5. Cement your financial position.
Maybe things are going well for you right now. You're comfortable with your income and your job. Even so, now would be a great time to stay agile and solidify your strategy. There might be a chance to secure your position with additional training and become a more valuable employee at work, potentially increasing your compensation. If things are just OK, now is the time to maximize any additional opportunities for training, overtime, or important projects at work. If another person in your household has been thinking about joining or rejoining the workforce or has additional earning potential, it could be a great time for them to do so. When things are going well, it might be easy to leave well enough alone, but these few moves to strengthen your financial well-being can make all the difference.
It may be difficult to pinpoint what the economy will do next, but if there was ever a time to do a little P.A.N.I.C. for yourself, now could be it.
BCU is here today for your tomorrow. Visit BCU.org to put your financial well-being first.
• Peter Waitzman is a Senior Program Manager at BCU.