When times are tough financially, it’s a good idea to reassess your budget and look for areas where you could cut back. But while you may be tempted to stop all investment efforts, it may make sense to keep at it with some goals if your situation allows it.
Here are some considerations to keep in mind as you decide how to handle your current situation while still making your future a priority.
4 Investments You Should Pause During Hard Times
Ultimately, your unique situation will dictate how best to handle your investments during difficult financial times. For example, if the economy is in recession but you have some wiggle room in your individual budget, buying stocks and other investments when prices are down can result in a “discount.”
But if your particular financial situation is in poor shape, here are some investments you may want to cut out until you get back on your feet:
4 Investments You Should Not Pause During Hard Times
Again, your situation will determine the best approach for you, and if your budget only allows for necessities, you might need to put all investment efforts on hold for now.
But if you have a little flexibility, consider continuing to make contributions to the following, even if you need to reduce how much you save:
How to Continue Investing During Hard Times
If you’ve hit a rough patch, it’s important to prioritize your necessary expenses. But depending on your situation, you may be able to continue investing. Here are some steps you can take to manage your current situation and continue to work toward your financial goals:
- Strip contributions to the bare minimum: Even investing a little every month can have a positive impact on your long-term financial plan. What’s more, the habit of investing a little every month can keep your financial goals in focus so that you can easily increase your contributions again when you’re ready.
Don’t Forget to Prioritize Your Credit During Difficult Times
As you determine which areas of your financial plan to focus on during rough times, don’t risk damaging your credit for the sake of investing. If you miss a payment on a loan or credit card, it could damage your credit score, making it more difficult to get approved for credit in the future and steering you toward more expensive loans and cards.
More expensive credit will not only worsen your current situation but can also threaten your ability to invest in the future. With Experian’s free credit monitoring service, you’ll get access to your FICO Score and Experian credit report, as well as real-time alerts when changes are made to your report.
As you track your credit regularly, you’ll have a better understanding of how your actions impact your score, and you’ll also be able to address issues as they come up to avoid further issues.
The post Should You Stop Investing When Money Is Tight? appeared first on Experian’s Official Credit Advice Blog.
