Since the beginning of March 2023, two banks have failed, becoming the second and third-largest bank failures in US History. Our financial expert shares what’s next….(read more)

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In recent times, we have witnessed two historic bank failures that have shaken the financial world. First, there was the collapse of Wirecard AG, a German payment processor, which filed for insolvency after disclosing a massive fraud in its accounting books. This was followed by the failure of the Nigerian lender, Union Bank of Nigeria, which was put under the control of the Central Bank of Nigeria due to severe financial distress.

These two events highlight the importance of taking control of your finances and being proactive about safeguarding your money. Here are some steps that you can take to protect your finances right now:

1. Diversify Your Investments

It is essential to diversify your investments to avoid concentration risk. By investing in multiple assets such as stocks, bonds, real estate, and commodities, you can lower your overall risk exposure. This is because different assets have varying degrees of volatility and react differently to market fluctuations. When one asset class performs poorly, other assets may perform well, resulting in a balanced portfolio.

2. Keep An Eye On Your Banking Institution

It is essential to keep a close eye on your banking institution and monitor its financial health regularly. Several online tools can help you track your bank’s financial health, such as the Federal Deposit Insurance Corporation’s (FDIC) BankFind tool. In addition, you should track your account balances and transactions regularly to detect any fraudulent activities or irregularities.

3. Consider Government-Backed Deposit Insurance

Government-backed deposit insurance schemes, such as the FDIC in the US and the Financial Services Compensation Scheme (FSCS) in the UK, provide deposit protection up to a certain amount. In the US, the FDIC covers up to $250,000 per depositor per account type, whereas in the UK, the FSCS covers up to £85,000 per depositor per institution. Consider moving your funds to an institution that offers government-backed deposit insurance if your bank does not provide this protection.

4. Re-Evaluate Your Savings And Expenses

With the uncertainty surrounding the economy, it is crucial to re-evaluate your savings and expenses. Consider creating an emergency fund that can cover at least six months of living expenses. Also, look for ways to cut down on costs and simplify your budget. This can involve downsizing, negotiating better deals with service providers, and reducing unnecessary expenses.

In conclusion, the recent bank failures underscore the importance of taking control of your finances and being proactive about safeguarding your money. By diversifying your investments, monitoring your banking institution, considering government-backed deposit insurance, and re-evaluating your savings and expenses, you can protect your finances from unexpected events.