The rising cost of living presents an increasingly demanding challenge for many Americans, turning it into the primary financial worry among the country’s residents. While the economy is recovering from a global pandemic, with indicators like the stock market performance and low unemployment rates looking positive, there is still discomfort amongst those dealing with personal economic struggles.
According to the latest findings from a study from earlier this year by the CFP Board, 9 in 10 Americans are worried about the cost of living. Besides the high cost of living, the issues relating to rising healthcare expenditure, the cost of education, and skyrocketing daily expenses have also emerged as critical concerns among them.
It is imperative to adopt a multifaceted approach, emphasizing financial wellness, retirement planning, and the utilization of professional financial services.
Therefore, let’s discuss some actions that can be taken to navigate these challenging times.
Ensuring Financial Wellness through Retirement Planning
To alleviate financial concerns, one must improve their financial wellness. This means controlling one’s daily financial tasks, developing the ability to absorb a financial shock, and understanding personal finance well. One crucial aspect of financial wellness is retirement planning.
Early retirement planning can ensure financial stability in the future, mitigating rising cost-of-living concerns. It safeguards against unforeseen circumstances like inflation or recession, offering smooth economic sustenance post-retirement. By consistent saving and intelligent investment, people can accumulate funds to combat the rising costs in the future or during their retirement years.
Achieving financial wellness involves meticulous budgeting, strategic saving, and astute financial decisions to mitigate financial stress. This robust financial foundation is crucial for confronting the rising cost of living challenges, ensuring that individuals can maintain their livelihood without capitulating to economic pressures.
Creating an Emergency Fund
Maintaining an emergency fund is a significant part of any financial plan. An emergency fund should carry three to six months of living expenses. Regular, automatic transfers from one’s checking account to a savings account, even if they start as small as $15 a week, can build a substantial fund over a more extended period.
While the high cost of living is a pressing concern, proactive financial planning, professional advisory, maintaining an emergency fund, and prudent investing can help alleviate the associated financial stress while staying calm and relaxed.
Start Your Retirement Planning Today
Retirement planning has never been more essential, with the rise in the cost of living outpacing income growth. Early retirement planning empowers individuals to craft a future where financial concerns do not detract from their quality of life. By setting aside a portion of one’s income into a retirement fund or a fixed-income portfolio, individuals can envision a financially secure retirement, irrespective of the economic landscape.
Financial advisors often stress the importance of early retirement contributions, highlighting the compound growth benefits and the cushion it provides against the increased cost of living.
Intelligent Portfolio Management
Financial advisors offer personalized advice tailored to each individual’s financial situation, goals, and risk tolerance. Their expertise can help you achieve financial stability that one might overlook, such as optimizing a fixed-income portfolio or identifying tax-efficient investment strategies.
Moreover, wealth management firms often provide portfolio management services offer a sophisticated layer of investment strategy tailored to navigating the high cost of living. These services meticulously curate a mix of assets designed to achieve specific financial objectives, considering the individual’s current financial status and future goals.
Wealth Management Is the Key
Owing to the increased cost of living, the role of wealth management assumes top importance. For example, if earning $3000 per month seems low today, then even $10000 per month will be sufficient tomorrow with proper wealth management.
Understanding your long-term and short-term goals, balancing your current earnings, managing recurring expenditures, and saving part of it for the future is the key. Unfortunately, many of us are not experts in handling finances.
It’s highly recommended to contact a wealth management firm today and take their guidance on constructing a diversified investment portfolio, including fixed income assets, equities, and alternative investments, designed to weather inflationary pressures and market volatility.
A wealth management firm brings under one roof a comprehensive suite of services designed to address numerous financial concerns—from retirement planning to investment management.
Conclusion
While the high cost of living is a formidable challenge facing US residents, it is not insurmountable. Individuals can navigate and thrive amidst economic fluctuations through strategic financial wellness planning, diligent retirement preparation, and the insightful counsel of financial advisors and portfolio management services.
Embracing these strategies paves the way to financial security, ensuring that today’s dreams translate into tomorrow’s realities. Considering the high cost of living and unpredictable economic scenarios, it would be beneficial to seek expert financial advice.
Financial advisors are equipped to guide on essential matters like budgeting, retirement, tax, estate, and investment management. They help formulate a comprehensive financial plan that suits the individual needs and concerns of the client. Veda Financial (VF) is a leading Registered Investment Advisory firm committed to delivering unparalleled portfolio management services and solutions for retirement planning. Contact us at for more information.
