Carla Seely Column: Is Now A Time To Save?

October 17, 2022

Carla Seely Bermuda October 2018[Written by Carla Seely]

Is Now a Time to Save, or Should I Keep Spending?

Unless you’ve been living in a remote cabin with no connection to the outside world, you’re probably aware of the looming concerns that most global economists and global leaders share. Their primary worries can be summed up in an unsettling pair of words: global recession.

A global recession can dramatically impact not only your country of residence, but also you personally – there is no immunity or safe haven when this type of trouble is looming. Now more than ever, thinking carefully before spending is of crucial importance.

So, Why Do Economists Suspect We’re Slipping into a Global Recession?

The reality is most countries around the world are experiencing the same financially related events at the same time. These include rising interest rates, falling bond prices [fixed income], equity market returns in the double-digit negatives, and declining real estate prices due to increased lending rates.

And, if that’s not enough, let’s talk about inflation and the ever-increasing cost of goods and services driven predominately by supply chain issues, which is making it harder and more expensive to get basic items.

On top of this, employers are also facing notable recruitment nightmares these days. In the aftermath of the pandemic, they’re struggling to find employees to service their businesses and it seems no industry is immune. As a result, qualified employees are often being poached by competitors, while some industries are struggling to find applicants for entry-level positions.

With everything that’s going on around us, it can be challenging to maintain a positive outlook. However, we can benefit from having an awareness and an understanding of the impact these things can have on us. Now more than ever, it’s important that we think long and hard before making any decisions regarding spending versus saving.

Our retirement specialist, Kenisha Douglas, often chats with her retirees about their spending habits, and it always comes down to two key questions:

1.Do you like it, or do you love it?

2.Do you want it, or do you need it?

Furthermore, she often probes her retirees with other thought-provoking questions to ensure that they fully understand the consequences of overspending, and to educate them of the importance of staying within a monthly budget.

Whether you’re similar to one of Kenisha’s retirees, or someone fresh out of college, the question remains: is it time to start saving more or should you continue with your current spending habits?

In short, saving should be a key component in anyone’s financial goals; it’s even more paramount when a potential recession is looming for two reasons:

1.If you find yourself between jobs, having extra savings will help you to cover your day-to-day expenses while you search for your new role.

2.With those extra savings, now is a great time to start investing – everything is currently discounted and the goal with investing is to buy low.

At the end of the day, although you can’t control what’s happening in the economy – whether it’s interest rates rising or the stock market having a bloodbath – you can control what you spend your money on and what you can set aside to save.

- Carla Seely is the COO at Freisenbruch. If you would like any further details, please contact or call 441 297 8686

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