Controlling What You Can
This past year brought significant challenges, especially for those in the public sector. After the longest government shutdown in history, Congress urgently needs to secure funding for the remaining federal agencies before January 31, 2026. Doing so can prevent further disruptions. Meanwhile, government spending and long-term fiscal sustainability are pressing concerns that affect us all.
On a broad scale, government debt can weigh down economic output over time, ultimately hurting individuals and businesses that rely on government services. Should the situation worsen, the erosion of confidence in the government could spark stock market declines and have lasting implications for America's creditworthiness. For another discussion of the consequences of a debt downgrade, read my colleague, Angel Irazola’s blog here. All of these possibilities have very real impact on American consumers, who need to be prepared for situations that they have little control over.
Taking charge of your finances can boost your confidence amidst external challenges. Start by reviewing both your mandatory and discretionary spending, carefully evaluating recurring payments such as internet, cell phone bills, subscriptions, and insurance premiums. Consider budgeting whenever you have significant changes in life, whether planned or unplanned. Knowing where you spend your money is a powerful first step towards setting future spending goals. Once set, you can review your goals periodically and update your financial plan regularly so you can be proactive in securing your financial future.
Another way to address uncertainty is having sufficient cash reserves for emergencies. Building this safety net can provide peace of mind and a sense of security during uncertain times. For example, if another government shutdown occurs, or if you face an unexpected health issue, do you have enough money set aside to cover these expenses? Having a financial cushion enables you to navigate challenges without being compelled to sell investments at inopportune times.
If your expenses are easily met and your savings are robust, check whether your investments align with your financial goals. For short-term needs, you could add money to your money market fund. This ensures you have cash ready in case a buying opportunity arises. For long-term needs, review if you are on track to retire when you want. Consider if there are other long-term investment goals you should reassess.
At West Financial, we are committed to helping our clients achieve their financial and investment goals. While we cannot control the markets (or the government), we can work with you through the nuances of each financial decision. Ultimately, you are in the driver's seat of your finances, and we are here to serve as your GPS, guiding you along the path ahead!
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This information is intended to be educational in nature, and not as a recommendation of any particular strategy, approach, product, security, or concept. These materials are not intended as any form of substitute for individualized investment advice. The discussion is general in nature, and therefore not intended to recommend or endorse any asset class, security, or technical aspect of any security for the purpose of allowing a reader to use the approach on their own. You should not treat these materials as advice in relation to legal, taxation, or investment matters. Before participating in any investment program or making any investment, clients as well as all other readers are encouraged to consult with their own professional advisers, including investment advisers and tax advisers.