In Times Like These…

Bren Sheriff
Bren Sheriff

In Times Like These…

There is a lot of noise right now about what President Donald Trump has called a “short-term excursion” in the Middle East. But what we are witnessing is far more than a passing moment. It is a conflict that has already begun to ripple through global markets, energy prices, and, ultimately, household budgets here at home.

You may not follow what’s happening in the Middle East. You may not watch the financial markets every day. But when conflict breaks out anywhere in the world, I am sure you will agree with me—it does not stay over there.

It shows up right here at home. You see it at the gas pump. You feel it at the grocery store. You notice it in rising prices across everyday items and services. It seems unavoidable—everything is costing more.

My intention is to give you hope in this time of rising costs. None of us have any control over prices, but we do have control over our actions during this time.

Take a deep breath and concentrate on building or reinforcing a 3–6 month emergency reserve. Some of you already know this; it has long been a standard practice and the first step in financial planning. I can hear some of you now: “How can I save money with rising costs when I am living paycheck to paycheck?”

I have one word for you. It is not a word that is going to bring you comfort, but it is a word that, if followed, will give you financial assurance if times get worse. The word is “sacrifice.”

You have probably heard the adage, “Short-term pain for long-term gain.” Yes, sacrifice can be uncomfortable, but it is often the only course of action that prevents disaster—especially in the area of finance. Think of it this way: if prices continue to rise and your spending habits do not change, how will you survive?

My suggestion is that you begin to think about the sacrifices you can make starting right now that will help fortify your finances and sustain you in times of financial crisis.

As a financial planner, I have helped families become more financially secure—if they were willing to sacrifice. The sacrifices required are not going to harm you, but they can position you for a more secure financial future.

Where should you begin? Let’s look at the “chump change” items—the money you spend without a second thought. For example: lottery tickets, fast food, adding another cable or streaming service, unnecessarily purchasing a new mobile device, paying premium prices for designer items, overpaying for personal grooming services and products, and making impulse purchases. In other words, spending money on things you don’t really need, with money that you may need in a crisis—STOP IT!!!

One quick fix for both our fiscal and physical health in our Black communities is to decrease our purchasing and consumption of fast food. We purchase more fast food than any other racial group (Blacks 42.6%, Whites 37.6%, Hispanics 35.5%, and Asians 30.6%). Yet we own fewer of the fast-food businesses (Blacks 16%, Whites 82%, Hispanics 18%, and Asians 18%). As my grandmother used to say, “There ain’t no accountin’ for dumb stuff.”

We, as a people, exhibit behaviors that are not in our best interests—neither fiscally nor physically. If you see yourself in any of these spending habits and are willing to make the sacrifice—either by doing without, reducing frequency, or choosing better alternatives—you may be on your way to creating the 3–6 month financial cushion you will need to sustain yourself in an emergency and improve your health.

Additionally, with the money recouped by changing your spending habits, you can consider increasing your monthly payments on debt. The faster you pay off debt, the less money you will spend on interest, thus creating more money to save.

One of the things I learned as a scout was, “Always be prepared.” It has also been said, “It’s better to have and not need than to need and not have.” I know that I’m probably wearing you out with these old words of wisdom that were based on common sense. Well, as the old folks used to say, “Common sense ain’t so common no mo’.”

I suggest that you ask yourself this question: “In times like these, do I need an emergency fund?” Hopefully, your answer is a resounding “YES!”—and that you will commit to starting or strengthening your emergency fund today. It is the right thing to do to provide the protection you may need tomorrow, starting today—in times like these.  Get your house in order.

Best to you and yours,

Bren Sheriff, CSA

THIS WEEK’S QUIZ: How much money should you have in your “rainy day account”?

Answer to last week’s quiz: Because beneficiary designations are contractual and are paid directly by the financial institution, outside of the will or trust.

For Questions or Help: 773-817-0601 or basheriff1@gmail.com

Disclaimer: The illustrations presented in this column are not, nor are they intended to be, legal, financial, or any other licensed professional advice, you should contact the licensed professional of your choice for advice on your individual situation.

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