Whether
you're an older worker with seemingly few options to recoup significant
investment losses, or a younger worker with minimal or no investment savings at
all, don't let a difficult financial climate scare you into not taking any
action at all.
Take stock
of your situation and formulate a plan by starting with the basics:
Pay down
debt. Reduce the
chokehold that credit cards have on your budget. Pay off the highest
interest-rate card first, and then apply that payment to the next-highest
interest-rate card. Stop charging.
Spend
less. Identify needs
vs. wants, and then set priorities. Many so-called needs actually are wants in
disguise.
Rebalance
your stock portfolio.
Do your investment choices reflect your risk tolerance and investment strategy?
Keep some
liquidity. Consider
stashing some cash—perhaps three to six months' of living expenses—in a money
market account at Coosa Valley Credit Union, which is insured to at least
$250,000 by the National Credit Union Administration.
Increase
your contributions.
Many stock prices are at low. If possible, bump up your contribution.
Diversify. Spread your wealth among a variety
of investments: domestic, international, financial services, technology, health
care, and so on.
Use
dollar-cost averaging. By having just $50 each paycheck automatically directed to a mutual
fund, your contributions will purchase more shares when the price is low, and
fewer shares when the price is high.
Work
longer. If you're
close to retirement, consider hanging on to your current job longer than
planned, if you can. Or, secure part-time work after retirement. This reduces
the number of years you'll dip into your investments and helps build additional
savings.