4 Ways Middle-Class Earners Are Protecting Their Money in Today’s Uncertain Economy
When it comes to the global economy these days, you should expect the unexpected. Stock markets are behaving like roller coasters, prices of everyday goods continue to rise, and the job market remains unpredictable. Middle-class earners are feeling the strain. Protecting their money — and their peace of mind — in such uncertainty is a daunting task. Fortunately, safeguarding their hard-earned savings may be easier than they think.
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According to Jayant Mistry, CFA, senior vice president, CFO and treasurer of consumer banking at Synchrony, there are some simple yet effective steps middle-class earners can take to ensure that the ups and downs of the broader economy don’t send their personal finances into a spiral.
He shared some of these tips with GOBankingRates as part of our Top 100 Money Experts series.
Plan for a Rainy Day
While you’d like to believe your life will be nothing but sunshine, rainy days — like a job loss, car troubles, health issues or home repairs — will inevitably roll in. Mistry says middle-class earners can protect themselves from getting wet by setting up an emergency fund.
In addition to saving for major life goals, he encourages people to set aside money that can insulate them from financial surprises.
“I think being financially secure is about planning not just for large events, but also rainy days,” he said. “We all have so much going on in our lives, so having tomorrow or someday funds around allows people to feel more secure and have flexibility when difficult life events occur.”
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Set Up a System To Pay Yourself First
Though you might want to dive straight into investments or complex money management strategies, Mistry says you’re better off starting slow and simple. He recommends setting up three different bank accounts: one for required expenses, one for wants (such as a money market account) and one for emergencies (ideally a high-yield savings account).
Once you’ve set up your accounts, Mistry wants you to establish a system that lets you “pay yourself first” — or add to your savings — automatically.
“Go online and open an FDIC-insured high-yield savings account, link it to your checking account and set up an auto transfer amount into your savings every pay period,” he said. “This will ensure consistent contributions without having to think about it.”
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