Skimm Money: Inflation, Bear Markets, And Conscious Spending

Eyes On

Investing in a Bear Market

The S&P 500 has dropped more than 18% over the past year. Annnd the market may not have hit its bottom yet. If you’re new to investing, a bear market — aka when stocks decline by at least 20% after a peak — might not seem like the best time to get started. But it has its upsides. Your move…

• Take care of the basics. Investing is risky, so make sure you’re on top of paying your bills and building up an emergency fund, too.

• Play the long game. Be in it for the long haul, and know that the stock market has recovered from every downturn in history so far.

• Follow a dollar-cost-averaging strategy. Buy investments at regular intervals, regardless of how the market is performing. Hint: If you buy into a properly diversified portfolio, this strategy could minimize risk.

Money Tip of the Week

Focus on what matters to you. 

There’s a ton of money advice out there, but the key word in “personal finance” is *personal.* Example: If you’re happy renting, don’t worry about saving for a down payment on a house. Make room in your budget for what’s important to you and make conscious spending plans the norm.

Financial Goal Unlocked

The goal: Save for that vacation you’re already dreaming about.

A winning mindset: It pays to plan. Before booking your trip, you want to set a goal for how much you need to save, make room in your budget, and prep for unexpected costs.

A winning strategy…

• Start saving ASAP. Ex: If you start saving for a $3,000 trip four months in advance, you’ll need to set aside $750/month. If you start saving a year in advance, it’s only $250/month.

• Create a sinking fund. Aka a place to put all this cash. That way, you won’t dip into savings meant for something else accidentally. Like emergencies. 

• Rethink your spending. Building your vacation fund can mean cutting back on other expenses like takeout. PS: Here are 10 ways to save more.

• Prep for hidden fees. They can sneak up on you (hi, seat selection fees). Make sure you have some room in your budget, just in case.

theSkimm

Vacations can be expensive. Know how much your trip is going to cost and plan as far in advance as you can to cut down on expenses and stress. Now all that’s left to do is pack your bags.

And Also This…

What’s (still) slowing down...

Inflation. Which dropped for the sixth straight month in December, thanks in large part to gas prices falling sharply last month. But we’re not out of the woods yet. Food prices are still rising, but thankfully for our budgets, at a slower pace.

What could be cut in half…

Student loan payments for millions of borrowers enrolled in income-driven repayment programs. 

What we’re using ASAP…

Those 20% off Bed, Bath & Beyond coupons. Because they might not be good for much longer.

What should be at the top of your to-do list in 2023…

Rest. Hustle culture is out. Breaks are in.

Asking for a Friend

What advice do you have for pivoting to a new career or industry?

Cinneah El-Amin: Spend at least 60% of your time networking and only 40% of your time actually applying to jobs. Because your network is ultimately what’s going to help you bridge that gap between where you are now and where you want to be. Networking can be as simple as going through your alumni network and seeing if there are any people who have a job title you’re interested in. Then, when it comes to applying to jobs, I like to remind job seekers that more is more. Especially for career pivoters, you want to have as many interview cycles as possible. Applying to as many jobs as possible will give you more practice and boost your confidence. You don't want to wait until you have an interview with your dream company and then realize that you’ve never had to give an elevator pitch before.

Cinneah El-Amin is the founder of Flynanced where she helps “9-5 hotties” leverage their pre-existing skills to move up (and laterally) in the corporate world, increase their income, and become 100% debt free. Her answer has been edited for length and clarity.

Skimm’rs

Tell Us How You Really Feel: As anyone with an Ed Hardy trucker hat collecting dust in the back of their closet can tell you, some things just aren’t worth the $$$. What’s a purchase that you regret making and why? Tell us here.

Last week, we asked you to share your 2023 money resolutions, and you’re kicking off the new year right. Here’s what you shared…

“I’m going to save enough to pay off my student loans if they don’t end up getting forgiven.” — Tia W, Washington, DC

“I want to make a more sustainable plan to build my emergency fund and to invest for shorter-term expenses like travel and home upgrades.” — Maria L, Appleton, WI

“My goal is to pay for our dream wedding WITHOUT using credit cards or taking out any loans, while simultaneously paying off existing credit card debt. We've booked most of our vendors and have already paid at least half of those contracted amounts. Wish us luck!” — Emily K, Denver, CO

Answers have been edited for length and clarity.