Here’s how to keep your focus on the big picture during unsteady times

Paul Fain, CFP®

Here we are in 2022 and the world seems like a crazy place (again)! Armies on the move. Consumer prices reaching decade highs. The coronavirus pandemic continuing to impact our daily lives.

What should be your next decision with your personal finances? Should you sell out of your stock investments? Should you buy bitcoin? Should you invest in an e-commerce giant such as Alibaba or Amazon? Which mutual funds will meet your needs, Fidelity or Vanguard? Uh, no, no and no. You are missing the forest for the proverbial tree.

There is wisdom in stepping back from the personal financial minutiae to examine the bigger picture. That is where the real peace of mind exists.

How are your head and your gut aligned these days? Are you making financial decisions under duress, or in fear, or in panic? Take a deep breath, write your thoughts down, then set aside some planning time. Learn ways to increase your resilience. Build flexibility into your financial plan. Foster a mindset of adaptability. No kidding, think on these things and make them a reality. It is more important than Alibaba versus Amazon.

Worried about current events? Make short-term preparations but keep a long-term perspective. For example, increase your cash reserves, pay off debt, enhance your cybersecurity, rebalance your investment portfolio – take action.

Keep it simple stupid, my father used to say. Applied to personal finance, there is nothing more impactful than simply living within your means. Period. Set up some type of cash flow tracking system. It could be on a yellow pad! Just do it. Be conscious of where your money goes. Periodically market shop your insurances, phone and cable plans, etc. As aforementioned, if you are concerned about recession, or war, or rising gas prices, then do something about it – maybe initiate some short-term austerity measures in your spending plan.

But don’t stop investing: “Now” is always the best time to invest. Stock investing is a long-term wealth growing strategy. Still feeling a need (maybe in a panic) to make a quick buck? Reserve the speculation for a separate “Vegas” account.

If you still can’t focus on the big picture, just take a few meaningful small steps: get your taxes done, update your will, review your life insurance coverage, research the quality/performance/cost of your largest investment holding. Bottom line: Assess how you are feeling and what you are thinking, conduct a financial self-audit, lean and look forward, and take action. It will be OK.

This article was initially published in the Knox News Sentinel on February 25th, 2022