In these turbulent times, many people, including chemical engineers, wonder how they should be managing their finances to achieve the best results for the present and future. Brian Madgett, former Head of Consumer Education at New York Life Company (retired in 2020), shares five things you can do to keep your finances on track, both now and for the long term.

AIChE recognizes the importance of financial stability for chemical engineers and their families. These five key strategies can help you navigate financial uncertainty and plan for the future.

1. Re-evaluate your financial strategy and stick to the basics

The basics ring true during both times of growth and times of uncertainty. Having proper life insurance coverage, a well-established emergency fund, a properly diversified investment portfolio within your risk tolerance, and a company-sponsored retirement plan to receive any available employer match are all vital elements of a protection-first financial strategy.

“This current environment is a good opportunity to step back and evaluate how you can live within your means,” said Madgett. “In addition to understanding how your income may change and creating a spending plan that’s sustainable over time, it’s also a good time to understand your employer benefits and take advantage of flexible spending accounts to offset unexpected health costs or discount programs that could provide special pricing on household items and family care services.”

2. Establish or grow your emergency fund

Having at least a few months of expenses is critical if losing your job might be a concern. Save what you can, and when interest rates stabilize, consider opening a high-yield savings account.

“If you haven’t started an emergency fund, start with what you can save now and evaluate opportunities to pause some of the discretionary expenses you regularly incur. Consider redirecting some discretionary and social funds to your emergency savings account,” said Madgett.

3. Get a handle on debt

Evaluate revolving debt, such as credit card debt, personal loans or loans against your home equity, and work with your lender to create a sustainable strategy. “It’s good to reach out to your lender or loan servicer to understand the options available to you,” added Madgett.

4. Ensure your protection-first approach has enough protection

Life insurance is the bedrock of a protection-first financial strategy, and it’s important to ensure that the coverage you have is adequate for any change in circumstances.

“Americans continue to prioritize the health and safety of their loved ones. Life insurance is one of the best ways Americans can ensure their families are financially protected,” noted Madgett.

5. Look to the long term

While it’s easy to make emotional decisions about money during stressful times, it’s important not to lose sight of your long-term financial goals and adjust your decision-making accordingly.

“Long-term retirement savings accounts are meant to be just that—long-term,” said Madgett. “Younger savers should stay the course with their retirement savings accounts where possible or consider decreasing contributions to ensure they are still able to receive an employer match. Those closer to retirement may consider guaranteed lifetime income to help ensure basic retirement needs are met.”

By following these strategies, chemical engineers can build financial resilience and better prepare for both the expected and unexpected challenges ahead. AIChE remains committed to supporting its members in their professional and financial well-being.