The economy has always been unpredictable, capable of throwing curveballs without warning. For many, life feels more precarious than usual right now. The implementation and continued uncertainty around tariffs have taken us into fairly unprecedented territory.
It’s difficult to get a clear picture of what we can expect. However, many financial experts are confident that we’re on the brink of a recession. Financial guru Suze Orman recently discussed the three best cash moves we can make during this turbulent time.
First, Orman advises putting your emergency savings in a high-yield savings account (HYSA). She recommends having a substantial amount set aside to weather any pains a recession may bring. By using an HYSA, your money can generate interest just by sitting there.
“Make 12 monthly deposits of at least $100 into your Ultimate Savings Opportunity account, and at the end of those 12 months you will be given a $100 bonus,” Orman said.
Cash strategies during uncertain times
That’s on top of earning a solid 3.10% annual percentage yield (APY) right now.
Second, Orman suggests putting cash you don’t need immediate access to in a certificate of deposit (CD) account.
CDs offer higher yields because you are committing your money to the bank or credit union for a set period, typically 1 to 5 years. You agree to pay a penalty if you need to withdraw the money early. Generally, the longer the term of the CD, the higher the APY.
Spreading your savings across a few CD accounts, known as CD laddering, can be advantageous. Finally, Orman recommends buying US Treasuries, which can be done most efficiently via an account at a discount brokerage. You can also take a laddering approach with Treasuries.
“For example, you could divide your ‘safe’ money across a 1-year, 3-year, 5-year, and perhaps a 7-year Treasury,” Orman wrote. “This way, you will have funds maturing at different times. Depending on your needs when a Treasury matures and the current state of interest rates, you can decide whether to reinvest in another Treasury and for what length of time, or consider other investment options.
By making these strategic moves, Orman believes individuals can better prepare themselves to navigate the potential financial turbulence ahead.
