Financial Tips for Turbulent Times

Whether you're an older worker with seemingly few options to recoup significant investment losses, or a younger worker with minimal or no investment savings at all, don't let the financial crisis scare you into not taking any action at all.

Take stock of your situation, learn from others' mistakes, and don't panic or pull all your money out of the stock market. Formulate a plan by starting with the basics:

  • Rebalance your portfolio. Do your investment choices reflect your risk tolerance and investment strategy?

  • Keep some liquidity. Consider stashing some cash--perhaps three to six months' of living expenses--in a money market account at HUECU-- which is insured to at least $250,000 by the National Credit Union Administration.

  • Increase your contributions. Most stock prices are at low, bargain-basement levels. If possible, bump up your contribution.

  • Diversify. Spread your wealth among a variety of investments: domestic, international, financial services, technology, health care, and so on.

  • Use dollar-cost averaging. By having just $50 each paycheck automatically directed to a mutual fund, your contributions will purchase more shares when the price is low, and fewer shares when the price is high.

  • Pay down debt. Reduce the choke-hold that credit cards have on your budget. Use the PowerPay principle: Pay off the highest interest-rate card first, and then apply that payment to the next-highest interest-rate card. Stop charging.

  • Spend less. Identify needs vs. wants, and then set priorities. Many so-called needs actually are wants in disguise.

  • Work longer. If you're close to retirement, consider hanging on to your current job longer than planned, if you can. Or, secure part-time work after retirement. This reduces the number of years you'll dip into your investments and helps build additional savings.

Harvard University Credit Union is ready to help during these tough times. Stop by any of our branch locations today and speak with a helpful representative. You can also email us or call us at (617) 495-4460 for more information and advice.

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