By Jovan Johnson, MBA, CFP®, CPA/PFS

In the midst of a national pandemic, economic downturn, and social injustice, it is very difficult to focus on your long-term goals and vision. It is important to understand that this season is only temporary, even though it may feel eternal.

Where do you want to be at the end of this pandemic? You can either use this time to propel your goals forward or you can continue to hold yourself back. One thing that can easily slip through the cracks during difficult times is financial management. We can all agree that one thing this national pandemic has taught us is that uncertainty and hardship are inevitable.

A major part of comprehensive financial planning is risk management. A long-term financial plan will ensure that you are still stable despite any situation that may come your way. Below are 5 financial areas that you should focus on during this time:

  1. Estate Planning Documents

I understand that most of us do not like to think about the idea of estate planning. However, there are two things that are inevitable in this life: death and taxes. No one could have predicted COVID-19 and the impact caused from it. It is important to create your estate planning documents now if you don’t have any. Or update them if any changes in your life have occurred (which they usually have).

Below is a list of items every estate plan should include:

  • Last Will and Testament
  • Financial Power of Attorney
  • Healthcare Power of Attorney
  • Living Will
  • Beneficiary Designations
  • Possibly a Living Revocable Trust

  1. Continue to Build Your Emergency Fund

One of the many lessons we can take away from this pandemic is the importance of having an emergency fund. With unemployment numbers high, salaries being cut, and no bonuses being offered, it is a good idea to start building up your emergency fund or replenishing a depleted one. The rule of thumb is to save 3-6 months of expenses for your emergency fund; however, I personally believe in saving 6-12 months of expenses for my own peace of mind. To achieve this, write down all of the monthly expenses that are essential to you living a “healthy” life and multiply this number by 3..6…..or 12.

As for potential places to keep your emergency fund, you may consider any of the following:

  • FDIC insured High-yield Savings Account
  • FDIC insured Money Market Account
  • FDIC insured Laddered Certificate of Deposit (CDs)

  1. Cut Expenses Where You Can

There are both pros and cons to working from home during this time. Some of the pros are not having to drive into the office every day, less Starbucks runs with co-workers, and less lunch dates. Also, while we are at home, we should take time to declutter our financial lives. Do we really need all of the subscriptions that we have? Are we actually using the cable that we are paying for? Once you begin to ask yourself these questions, you may realize the answer is NO to many of them. These are easy ways to save money and build up your emergency fund. Also, now is a great time to negotiate with lenders, bill providers, credit card companies, etc. to see if they can lower your interest rate or help in any other way.

  1. Give Yourself Grace

This year certainly started on a high note with many of us setting meaningful financial goals, with great intentions. However, COVID-19 may have derailed those plans. It is important to remember that financial planning is a journey, not a destination. Your financial goals and plans will constantly change, which will require you to pivot. I am a firm believer in the phrase, “delayed but not denied”. Now is a good time to reflect on all of the amazing things that you do have during this time: family, health, a job, and friends.

Conclusion

Now is the time to invest in and protect yourself, to ensure you keep the momentum going with achieving your goals. Do not let this pandemic get you down or lose hope. You will come out of this much stronger and wiser. If you are facing challenges during this time and would like to speak with a financial professional, please feel free to reach out.

Disclosures

None of the information provided is intended as investment, tax, accounting or legal advice, as an offer or solicitation of an offer to buy or sell, or as an endorsement, of any company, security, fund, or other securities or non-securities offering. The information should not be relied upon for purposes of transacting securities or other investments. Your use of the information is at your sole risk. The content is provided ‘as is’ and without warranties, either expressed or implied. Piece of Wealth Planning, LLC does not promise or guarantee any income or particular result from your use of the information contained herein.