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Op-Ed: Saving money while navigating turbulent times ahead

Inflation is at a 40-year high. Just a few days ago the Standard & Poor index plummeted 20% from its most recent high at the beginning of the year, sending markets into a frenzy and stocks on a rollercoaster ride.

In Puerto Rico inflation rate is currently at 6.1%.Gas prices in the island are reaching $1.50, a price never seen before, and the energy utility company just announced a new 17.1% increase in the electricity bill of its residential customers for the third quarter of 2022.

Just when things were going back to normal, war broke out between Ukraine and Russia, COVID-19 ravaged China weighing on global economic activity and that extra $100 you had every month for a night in town is being eaten out of your budget by all the rising costs. Yes, our wallets are strained, stocks are tanking, recession is the talk of the town, and we just started the hurricane season.

Amidst all you might be asking yourself: what can we do? Living through uncertain times is rough but it is not going to be forever. However, “it will last,” Economist Antonio J. Fernos-Sagebien, Ph.D. says. “There is no sign that inflation will stabilize in the coming months.”

So, here are a few pointers on how to protect your money and your family finances during these times:

Develop a positive money mindset — Yes…we are living uncertain times and every time we go to the store prices change while the price of gasoline soars every single day. This might send you in a state of panic. Keeping a positive outlook might not be your fist thought. However, my dear friend and neighbor Anna Orenstein-Cardona, a Certified Financial Educator (CFEI) and Wealth Coach with more than 25 years of experience in Europe and the US mainland says the path to solid wealth creation starts with nourishing a positive money mindset. We need to let go of limiting money beliefs and create the habits to succeed. While this is easier said than done, you need to stay positive and not freak out with the daily economic news. As a yoga teacher, I always tell my students “You only control your thoughts not the reaction of others.” Positive vibes!

Speaking about control…Control your lifestyle — Cut out on things that are not necessary. Rethink your purchases. Ask yourself: Is this necessary? If the answer is no, don’t waste your hard-earned money. This means cutting out on frivolities and all spending that is not based on an immediate need. Stretching our dollars should be our priority.

Time to have all your financial cushions in place — Analyze your savings. Don’t have savings? Save your available extra money. Now is the time to start an emergency fund (EF) if you already don’t have one. The ideal emergency fund should be able to carry you for six months (rent, food, utilities, etc.) However, this might not be feasible for you right now. Start small ($1,000) and grow your EF. Orenstein says you should also consider having short-term savings. These are NOT emergency funds savings but other savings that can be easily accessed in times of need.

The second emergency fund — Have a backup emergency fund for minor expenses that can make a major dent on your budget such as car repair or an appliance replacement.

Pay your credit card debt — Get rid of all the consumer debt in credit cards. The Federal Reserve has announced this week a .75% interest rate hike, the highest since 1994. Rising rates mean you will pay more for your consumer debt. A smart option is to transfer high-interest debt to a credit card with a 0% rate. You can also send all your extra money (if you already have an EF) to pay off your credit card. Do you have a cash award in the horizon? Your tax refund? Send all extras to your credit card, even if it is $25 per month.

Brenda Reyes-Tomassini is a public relations professional.

Take on a second job — Getting a side gig, if you have the time, is a great way to bring some extra cash to build your emergency fund or pay off debt. Boost your income and savings while acquiring new skills with a part-time job. Many places are looking for extra employees after the pandemic. You can always check in the retail and hospitality industry. If you sell something, it is time to use social media to your advantage to promote your product or service.

Review your investment portfolio or 401K — Now is the time to look at your portfolio and think about the long term. Don’t be petrified by what you see right now. You can still buy and invest. A bear market usually lasts 418 days. What does this mean? That while stocks are taking a beating right now, historically they recover well after a recession. 

Start your stockpile pantry — If you don’t have one or have been wanting to have one but haven’t gotten around to doing so, now is the time to start your own stockpile. Remember: don’t hoard. Buy what you need, take advantage of sales, and save for an emergency. During Hurricane María’s aftermath, my stockpile kept me and my two children out of the stores for two months. I stock up on food or household items such as detergents, deodorant, paper towel, shampoo, toothpaste, toilet paper and feminine hygiene products. The strategy is to buy items when they are at their lowest price possible (with sales, coupons, cashback apps etc.) and never pay full price. When one of the products on our list falls below the minimum stock-up price noted, I buy enough to last a few months, until the next deal shows up.

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This story was written by our staff based on a press release.

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