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Money Matters Thought Leadership

Turbulent economic times are stressful — but they don’t have to be

What middle-income Americans need to know as recession concerns grow.

Amid conflicting economic signals on high inflation, steady jobs numbers and rising interest rates, economists are increasingly confident that a recession is likely soon — they just don’t know exactly when.

While there are a lot of reasons for optimism even in these turbulent times, it’s easy for middle-income families to feel overwhelmed, said Amy Crews Cutts, PhD, an economic consultant to Primerica.

“It’s hard not to feel like the roof is crashing in on you,” she said. “You’re reminded every time you go to the grocery store and see the price of milk, gas up your car, or read the latest news about the Fed or stock market.” 

Middle-income Americans in particular feel stressed. For them, every dollar they put into their savings matters — and was put there deliberately, Crews Cutts noted. Just when families feel like they’re doing OK, the economy turns and worries creep in about paying for kids’ needs, fixing the house, or retiring as planned. 

“A year ago, you may have been feeling really good about your retirement savings,” she said. “Now, you may feel like you’ll never be able to retire.”

It’s a common sentiment worth addressing — not ignoring — during rough periods. Taking proactive steps now could save you a lot of grief in the long run — and better position you to come out of the recession with greater financial security.

As the holidays near, here are some tips to help you manage the current economy:

  • Set a holiday spending budget — and stick to it. It’s easy to go overboard during the holiday shopping season, but now is the time to really buckle down on that budget and figure out how you will pay for these purchases before you head online or to the stores. Primerica’s most recent quarterly survey found that 41% of middle-income Americans plan to spend less on holidays gifts this year, so you’ll be in good company if you do the same.
  • Address credit card debt. If you have credit card debt and are nervously watching interest rates climb, you may want to look into a balance transfer, which can save you money and sometimes provides an initial period of no interest. Another option: Ask for help from the National Foundation for Credit Counseling. Even if you’re not in dire straits, counselors can help you come up with a plan to pay your bills and manage debt.
  • Review your investment portfolio. Watching your retirement account balance decline with the stock market can be incredibly disheartening. But now is not necessarily the time to pull back on these investments. While every individual circumstance is different, an accepted investment strategy is to stay the course. Staying the course can be the first line of defense against a declining market. Another strategy could be to go on offense by looking for additional opportunities to invest while prices are lower.
  • Check coverage on major appliances. Families can easily put off bigger purchases around their home, but it’s those surprise emergency costs that hit middle-income Americans particularly hard. “When your water heater breaks, you don’t have time to save up or wait for prices to decrease,” Crews Cutts said. That’s why it’s worth checking the warranties on your major appliances and considering a home warranty policy if most of your major appliances or your HVAC system is more than 10 to 15 years old.

“The holidays should be a time of joy and cheer — not gloom and doom. Taking some steps to secure your personal finances now can allow you to relax and enjoy the season,” Crews Cutts said.

About Primerica, Inc.
Primerica, Inc., headquartered in Duluth, GA, is a leading provider of financial services to middle-income households in North America. Independent licensed representatives educate Primerica clients about how to better prepare for a more secure financial future by assessing their needs and providing appropriate solutions through term life insurance, which we underwrite, and mutual funds, annuities and other financial products, which we distribute primarily on behalf of third parties. We insured over 5.7 million lives and had over 2.7 million client investment accounts on December 31, 2021. Primerica, through its insurance company subsidiaries, was the #2 issuer of Term Life insurance coverage in the United States and Canada in 2021. Primerica stock is included in the S&P MidCap 400 and the Russell 1000 stock indices and is traded on The New York Stock Exchange under the symbol “PRI”.

 

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