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N26 x FinMarie—managing your money in times of crisis

Are you worried about your money in the current situation? FinMarie explains which investments are worthwhile and how you can save money despite rising prices.

6 min read

Has the geopolitical landscape got you worried about your money? Don’t panic. Here, FinMarie shares tips for which investment strategies are worth it and how you can save effectively—even during hard times. 

Globally, there’s a lot going on right now. The current energy crisis, inflation, a worldwide pandemic, and war in Ukraine are all painting a pretty bleak picture for global markets. Just a few months ago, it seemed as though we had weathered the pandemic and markets were recovering. And then, the war in Ukraine changed everything. 

So, what can you do? Well, one thing’s for sure—hiding your head in the sand or stashing money under your mattress isn’t a great idea. On the other hand, investing may feel too risky. Is there a happy medium?

You may be surprised—there are a few simple steps that anyone can take to manage their money well, even in times of crisis. 

The first thing to do is to get a handle on your finances. Take a close look at your assets. How much is left over at the end of each month? Is it possible to earn more than you currently do? This will give you a better idea of how prepared you are to handle the current price increases. Outside of that, we’ve come up with 5 concrete tips to help you protect yourself from inflation. Let’s go! 

1. When prices go up, lower your expenses

One important way to protect your money from inflation is to reevaluate your expenses. Many of us don’t take the time to check our monthly budget and look for ways to reduce our spending. 

Sometimes, this doesn’t even feel like much of a sacrifice. Examples could include your telephone or smartphone contract or your bank account fees. Consider whether there are more affordable options for your checking account, credit card, or smartphone flatrate. Changing these up is often relatively easy. The advantage is that you can bring your monthly expenses down and save even more money without much extra work. 

Another example is loan payments. Refinancing options can help you save a ton of money in interest, thus reducing your costs even further. Although interest rates have risen this year, every cent counts when you’re paying off debt. The bottom line is: Cut corners where you can, and you’ll see results in both the short- and long-term.

2. Invest to fight inflation 

The best protection from inflation is a widely diversified portfolio of index funds with exposure to worldwide markets. The diversification is designed to enable high returns while hedging against the risks that individual shares carry. Diversification also plays a role in ETF portfolios. A broad portfolio is one that includes 5,000 securities from more than 40 countries, including stocks and ETFs. 

Negative developments in single stocks barely affect the total value of a diverse portfolio. Even for investors who want to invest sustainably, there’s a chance to pay attention to broad diversification. However, because the sustainable investments only include companies with a top ESG rating, they often contain fewer securities (600 or so) than a portfolio that is more broadly diversified. 

Contrary to different types of savings accounts, investing with ETFs has a clear advantage: If you earn returns that are higher than the current inflation rate, your money isn’t losing its purchasing power. With classical saving, this is virtually impossible due to low interest rates. 

3. Pay attention to energy prices

For many of us, the current increase in energy prices is serious. It impacts both diesel and fuel prices as well as electricity, gas, and oil, making them all much more expensive. Compared to the previous year, the increase in this category is currently over 10%—even stronger than current inflation numbers. 

Given that energy consumption is very consistent, this affects nearly all households in Germany as well as drivers and transport companies. But here too, it’s not that you simply have to accept a major price increase. Gas or electricity costs can often be reduced by switching contracts or snagging a particularly good deal. If you want to change your energy provider, take a look at different options and get a quote of how much you can save by switching.

4. Take a deep dive into your personal costs and start a household budget

How does a household budget help with saving? For starters, it makes your own finances transparent and helps you structure your expenses. Pay particular attention to regular costs, such as for subscriptions or contracts. Is that newspaper subscription really worth it? Could you be going overboard with insurance policies? Do you need that gym membership after all? And what about Netflix, Spotify, or other services? Is it possible to share an account with friends? 

5. Protecting your retirement

When it comes to your long-term financial goals, it’s better to plan a little more money for old-age than you think you’ll need. Even with inflation, a long-term savings plan is important, especially if there’s some extra left over for retirement. 

With long-term investments, you profit from strong compound interest, which can give you a decent average return that should more than compensate for inflation. Here’s an example calculation to put this into context: With an average annual capital market return after 10 years, you’ve already earned more than 93%. After 20 years you’ve earned 272%, and at 30 years, that’s up to 619%. 

So, what’s the best way to manage your money during a crisis? Should you really invest? Many investors are currently struggling to decide between investing and putting money aside, due to high inflation and current stock market trends, respectively. 

In particular, the stock market tumble that happened after Russia invaded Ukraine left some investors feeling unnerved. This isn’t really due to the facts on the ground, but more to fear that the sanctions on Russia could hit the economy. This is unlikely, though—at least from a historical perspective. The Vietnam War or the 2003 war in Iraq didn’t lead to crashes, but rather to worldwide upturns in stocks.

In fact, even during the Second World War, Wall Street stocks rose sharply after the attack on Pearl Harbor. That’s why some investors use the phrase “buy shares when the cannons are thundering” (a quote from Carl Mayer, Rothschild banker).

As an investor, you should always keep your goal in mind—the purpose of why you’re investing. If it’s a long-term goal, it’s important to remain calm and hold onto a widely diversified portfolio. It’s better to have your money invested when prices recover, in order to profit from those returns.

So, let’s recap:

The war in the Ukraine will not necessarily lead to a stock market crash. In most cases, geopolitical crises are smoothed out in the market. 

A broad portfolio with worldwide exposure can protect you from any effects of the sanctions on Russia. The important thing for investment success is to focus on a long-term strategy.

And to help you feel even more reassured: In many cases, the current price escalation has already been factored into the predicted performance of stocks. 


Shares, ETFs, and funds referred to in the article are always subject to risks. Information provided in the article does not constitute any form of investment advice or recommendation to buy or sell securities or other financial instruments. All information provided is for educational and illustrative purposes only and represents exclusively the opinion of the author. None of this information constitutes a recommendation for a particular investment strategy. Should the readers adopt the offered contents as their own, make use of any information, or follow any opinion referred to in the article, they act at their own risk.

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