5 ways Arizonans can ease financial stress in uncertain times

Jason Shulick

Submitted photo/Jennifer Stewart

With the possibility of a recession, declining stock prices, out-of-control personal debt and uncertainty around money, many consumers are in a quandary as they figure out what to do with their money.

Arizona may experience more economic uncertainty soon, with growth expected to slow due to aging populations, high interest rates and a weaker national economy, according to the University of Arizona’s Eller College of Management’s recent Arizona Economic Outlook.

In times of uncertainty and hardships, here are five secure financial tips consumers can follow to maximize their financial well-being and eliminate unnecessary stress.

1. Generate a six-month emergency fund. First, consider putting money into a Roth IRA (if eligible) and then place the remaining money into a high-yield savings account. Roth IRA contributions can be withdrawn tax-free and penalty-free anytime if needed while the earnings grow tax-free for retirement. A high-yield savings account provides easy access to your money and can offer a safe return of around 4% with various FDIC-insured banks (the first $250,000 is insured by the FDIC).

2. Create a weekly cash flow analysis and monthly budget through the end of 2025. Spending five to 10 minutes a day updating your cash flow analysis and budget will help you understand your real-time financial status. Regularly reviewing your finances helps you make better daily financial decisions and eliminates future uncertainty and stress.

3. Build your financial knowledge. Improve your financial literacy by either teaching yourself or taking a class that covers all the pertinent financial topics to run your life successfully. Gaining this knowledge will be worth 10 times your weight in gold by strengthening your financial stability and reducing stress. This knowledge will ultimately benefit both your finances and overall well-being.

4. Understand your risk tolerance and ensure your investments match. If someone manages your money, meet with them regularly — not just once a year — to stay aligned with your comfort level. If you’re worried about market downturns and losing money, consider moving to low-risk options like a three-month certificate of deposit or a treasury bill. These investments can earn a guaranteed risk-free 4%+ return. After the CD or treasury bill matures in three months, reassess your investment strategy. This approach protects against losses while still allowing flexibility if market conditions begin to improve. If you have a high-risk tolerance, you may not want to invest too conservatively and miss out on potential earnings.

5. Consider all future expenses related to major purchases before making the purchase. If you’re planning on buying a house or a car, make sure you understand all the related expenses that go with that purchase, not just the monthly payment. For example, if you buy a new car, your personal property taxes and insurance on the new car will likely be more than your current expenses on your old car. Make sure you can afford all expenses related to these purchases. The associated costs should be in alignment with your financial goals. The last thing you want is to be financially strapped and stressed while trying to pay off these large purchases.

Remember, financial decisions should be made with logic and not with emotion. Emotional decisions will get you into trouble. Before you make a critical or large financial decision, stop and think about the pros and cons of that decision. The goal is to have financial freedom, not to create unneeded financial stress.

Editor’s note: Jason Shulick is the chief visionary officer of Phoenix-based Andorro. Please send your comments to AzOpinions@iniusa.org. We are committed to publishing a wide variety of reader opinions, as long as they meet our Civility Guidelines.