War and your money: My best advice on what to do today
How to be best prepared financially for the conflict's economic impact
Hi there, my friend.
Here at Ask, Save, Earn, there are two sayings I repeat over and over again. They’re also part of most everything I talk about in my book or in my role as Chief Consumer Finance Analyst (AKA Personal Finance Expert Guy) at LendingTree.
They were at the heart of what I wrote last spring when the implementation of tariffs sparked widespread fear of a recession.
Now, once again, they are at the core of my financial advice to those concerned about what this conflict with Iran may mean for their money.
Control what you can control.
and
You have more power over your money than you realize.
And, yes, of course, the potential ramifications of what’s happening in the Middle East obviously go way beyond just money. For this post, however, I’m focusing on your money and what you can do today to be better prepared financially for whatever economic impacts might come.
Possible steps to take today
So what does “controlling what you can control” look like in this context? How can I wield my power? Here are a few ideas:
Budget for higher gas costs: No one knows how long this conflict will last. However, we’ve already seen gas prices rise sharply. According to AAA, the average price of gas on Wednesday was $3.20. That’s up 9 cents from the day before and 22 cents from a week before. That’s well below the peak from a few years ago, but it’s still a big jump in a short period of time. If you spend a lot of money on gas, it makes sense to adjust your budget to prepare for the worst while hoping for the best.
Leave your 401(k) alone: At one point on Tuesday, the Dow Jones Industrial Average had fallen more than 1,200 points. By the time the market closed on Wednesday, it had climbed back up to nearly the levels we saw before that drop. That’s a perfect example of why panic selling can be so devastating. Markets rise and fall constantly. If you always sell on the way down, you’ll miss out on the gains on the way back up. For most of us, the best move is to simply ride the waves, knowing that history shows that our patience will likely be rewarded with higher returns.
Strengthen your cybersecurity: Cyberattacks are a powerful weapon of war today. While there’s so much that is unknown and out of our control, taking some steps to upgrade your digital security in the wake of recent events makes all the sense in the world. Those might include:
Strengthening your passwords
Implementing multi-factor authentication
Freezing your credit
Backing up important data
Consider travel insurance if you’re traveling soon: The Middle East is an awful long way from American shores, but anyone who travels knows that disruption anywhere in the world can mean headaches for travelers everywhere. Consider contacting your credit card issuer to ask about travel insurance coverage you might have with your card or consider getting a new card that offers better coverage. If you’re looking for more complete coverage, consider purchasing travel insurance from a third party.
Lower the interest that you’re paying: Interest paid to credit card companies and other lenders is money that can’t go toward building a financially stable foundation to help yourself and your family manage uncertainty more confidently. But the good news is that you have more control over your interest rates than you might think, especially if you have good credit. A 0% balance transfer card can be a game-changer. A low-interest personal loan isn’t quite as great as a 0% card, but it can save you money, too. And, of course, you can call your card issuer and ask them for a lower interest rate. It works way more often than you’d think, and I’m never going to stop talking about it.
Stop doomscrolling and put the phone down: It is a scary time, y’all. There’s no way around that. However, mindlessly scrolling social media or sitting in front of the television and marinating in your outrage doesn’t help anything. It is vital to your own health to step away from it all sometimes. Read a novel. Take a hike or go for a run. Watch a ballgame. Listen to some music. Call up an old friend. Have a date night with your significant other or do something goofy with your kids. Whatever helps you decompress, do it.
Now, don’t misunderstand that last point. I’m not at all saying to entirely disconnect from what’s happening. That’s the last thing I’d suggest. There are too many important things right now that demand action and could benefit from your involvement. Just make sure that you’re considering your own health in the process.
Until next time!
Matt