Finding strategies to protect and even bolster that cash cushion puts clients in the best position to handle future challenges with a recession looming, experts say
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Wendy Brookhouse, financial advisor and money coach with Black Star Wealth in Halifax, says some clients had an initial reaction to move money from their savings accounts when interest rates and the cost of goods, including grocery prices, began to rise earlier this year. However, this was short-lived as they came to terms with the new reality.
Clients have been through so much, and they should save as much emergency and buffer funds as they can right now, Ms. Brookhouse adds. “Maybe we’ll save it and then we’ll use the lump sum when it’s time to renew, because that way, we still have access to it for emergency funds if we need it,” she says.Daniel Frost, financial advisor and certified cash flow specialist with The Frost Group at Raymond James Ltd. in Medicine Hat, Alta., did see some clients hanging onto more of a cash cushion in the bank during the pandemic. But for the most part, he says, people returned to their normal spending habits quickly.
“It’s really about the peace of mind factor for clients in knowing that they already have that set aside and they don’t need to draw down from their investments in a period like this,” she says.’s COVID-19 surveys on financial well-being found, only 43 per cent of participants in 2022 said they had an emergency fund that would cover three months of expenses, compared to 64 per cent in 2019.
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