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Bright Ideas 2020: Make a spending plan and have a cash cushion

Bright Ideas 2020: Make a spending plan and have a cash cushion

LINDA LEPE

Linda Lepe

Bright Ideas are back! Leaders, innovators, entrepreneurs and people who are doing interesting things share their bright ideas for 2020 with the Cap Times. Find them posted here throughout the week and in print on Jan. 8.

What we know for sure about the economy in 2020 is that we really don't know. We don't know how the on-again off-again trade wars or the election will affect the economy. U.S. companies haven't negatively reacted to much of anything in recent years. However, the bull market we’re enjoying has been going on for over a decade, which is making some nervous.

What does this mean for the average person?

Have a cash cushion. Ideally, this equals three to six months of expenses, but any savings will help you ride out unexpected expenditures in 2020 without having to resort to credit cards or other loans.

Make or revise your spending plan. Do you have money left over at the end of the month? This a vital aspect of your financial health. Use the new year to look at your monthly cash flow and trim where you can. (Subscription services you don’t use? Eating out too much?) You can’t save for the future without a positive cash flow.

Consider how you feel about stock market volatility. Chances are 2020 will see periods of steep ups and downs. If you are a nervous investor or getting close to retirement, perhaps it’s time to convert some of your stock investments to something more conservative like bonds or cash.

Save for your future. Small amounts can add up to big dollars in the future.

People lose money to procrastination every day. Do something small now for a payoff later.

—As told to Steven Elbow

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