4 Moves to Shield Your Money Now as Iran Risk Rises, Warns a Financial Advisor
Written by
Gabrielle Olya
Edited by
Angela Corry
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Rising tensions involving Iran are already pushing oil prices higher and those increases can ripple quickly through to daily expenses. Higher energy costs can translate into more expensive gas, food, travel and other essentials, putting added pressure on budgets at a time when many Americans are already feeling stretched.
While geopolitical uncertainty can feel out of an individual’s control, there are practical steps consumers can take now to help protect their finances from the effects of higher prices and market volatility.
Here are four money moves a financial advisor said to focus on.
1. Adjust Your Budget for Higher Gas and Everyday Costs
Higher oil prices aren’t just affecting how much you’ll pay for gas at the pump — the effects are already much more widespread.
“The impact of higher oil prices is starting to be felt on anything that requires transportation, whether that be the direct use of cars and trucks by individual people or the buying of goods and services that require transportation,” said Marc Butler, a financial planner and author of “Master Your Money, Secure Your Future.”
As the conflict continues, increases in oil prices will be passed on to consumers. Americans should revisit their budgets sooner rather than later and account for higher costs in categories most exposed to fuel and transportation.
That may mean setting aside more money each month for gas, delivery fees or household goods, or identifying areas where spending can be temporarily scaled back to offset the increases.
2. Plan for More Expensive Summer Travel
Summer travel is another area where higher energy prices can catch consumers off guard.
“For people who are planning summer vacations and are on a tight budget, it will be important that they factor increased gas and transportation costs into their plans,” Butler said.
That could mean building additional cushion into travel budgets, booking earlier when possible or reconsidering smaller details — such as shortening trip lengths or traveling during off-peak days — to help control costs.
3. Shop Smarter for Gas and Groceries as Prices Fluctuate
Over the long term, higher energy costs can affect multiple categories of everyday spending, including groceries, restaurants and even lawn and garden supplies. According to Butler, many of these expenses are tied to oil either directly or indirectly through transportation and production.
“Americans can prepare for these increasing costs by keeping a close track of where they might be seeing these increases locally — for instance, which gas stations are increasing their gas prices the quickest, which grocery stores are seeing food prices getting more expensive, etc.,” he said.
For families or people on a limited budget, flexibility in cutting back will be very important as they see these prices going up.
“They can also prepare by finding places that might have cheaper gas or [by shopping at] discount grocery stores,” Butler said.
Being proactive — rather than reacting after prices spike — can make price increases easier to absorb.
4. Avoid Emotional Investing During Market Volatility
Periods of geopolitical tension often lead to short-term market swings, but Butler cautions against making hasty investment decisions based on headlines alone.
“From a market volatility standpoint, we encourage investors to take a long-term perspective,” he said. “Corporate earnings are still strong, and when this conflict passes, the volatility in the market should go down.”
Rather than pulling out of the market or radically changing strategies, stick to long-term goals, maintain diversification and review portfolios with a professional if concerns arise.
While tensions involving Iran may continue to influence energy prices and markets, Americans aren’t powerless. Thoughtful budgeting, strategic spending and a steady investing approach can go a long way toward protecting financial stability when external risks rise.
Editor’s note on political coverage: GOBankingRates is nonpartisan and strives to cover all aspects of the economy objectively and present balanced reports on politically focused finance stories. You can find more coverage of this topic on GOBankingRates.com.
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