Preparing for the worst

Sophia and I chatted a bit this past week about how we should be looking to save a bit more. With the market down and the possibility of a recession coming up, I’ve realized that we need to prepare for the worst case scenario.

Overall, I am happy where we are at financially, but it could be a lot better. Like most, we’ve been susceptible to lifestyle creep over the last few years. I’ve been guilty as well and a lot more loose with my cash the last couple of years post-pandemic. As someone who was really aware of the lifestyle creep, it was hard not to spend more during the past 2 years. The promise of the “Roaring 20s” was something ingrained in my head as I traveled a lot and bought toys. It’s time to settle down a bit.

I’ve also underestimated how much cash I should be holding onto. In the last few years, I’ve been putting a lot of money to work by investing in the public markets or startups. That’s great of course, but in a downturn, I’d feel a lot more secure for Sophia and I if our cash balances were a lot higher.

We’re not an extravagant couple by any means, but we hope to start a family in the near future and that changes the equation. The bear market did us a favor by opening our eyes a bit that things aren’t always going to continue to go up and downturns do happen. It was a nice sign that I need to make some lifestyle and money changes to protect my family’s future.