As the country slowly begins to reopen, many families are left with tough questions that don’t get answered in press briefings.
Will the government’s efforts prove enough to restart the economy?
What will the new “normal” look like for schools, restaurants, and retail shops?
Will the virus mutate?
Will its new form be milder — or more severe?
When will we have proven therapies for treatment and/or a vaccine for prevention?
At the bottom of those questions, no matter what words are chosen, there’s a consistent theme.
“Will we be OK?”
That begins with health, of course, as we all worry about our family members and loved ones. It also carries over into our finances. For those who are near retirement, COVID-19 has upended the chess board and tossed all the pieces into the air. Some people are being pushed into an unplanned early retirement. Others are dealing with furloughs. Many have seen their investment account balances take a dip and delay retirement by several years.
As a financial planner and a CPA, here are my thoughts on money in the wake of the pandemic.
Have a process for making financial decisions
The true value of a financial plan is in the framework that it creates around important financial decisions. No plan works out exactly as envisioned. However, a good plan gives you space to think about what-if scenarios.
What happens if the bottom falls out of the stock market?
What if you need to retire earlier than planned?
How would you pay for a hospitalization?
By looking at dozens of questions like that, we can do the math and consider possible actions. For some people, it’s about optimizing their retirement contributions. For others, it might be about selecting a different mix of investments. Either way, a plan is a roadmap, and you deserve to have a roadmap in uncertain times like these.
Keep your emotions in check
I won’t sugarcoat it, these are scary times. Headlines try to outdo each other in their ability to prevent you from sleeping well at night. There’s much disagreement about the course of action to pursue. Nobody knows what tomorrow will bring.
Still, do your best to not panic.
In moments like that, remember that financial decisions made out of fear will only lock in your losses. I can’t tell you whether you should go to cash, invest in stocks, or buy more life insurance. What I can tell you is that now is a good time to talk to a trusted financial planner and a CPA (bonus point if it’s the same person!) As any other uncertain situation, this pandemic has created opportunities and traps. Be sure to navigate it with an experienced professional by your side.
Stay alert for scams
Do you know who else has been stuck at home with lots of time on their hands? That’s right, criminals who want to separate you from your money!
Brand-new scams come in the form of calls, emails, text messages, website links, and social media advertising. Cybercriminals might try to sell you fake COVID-19 testing kits or vaccines. They might pose as the World Health Organization, the IRS, or a family member in distress. Or they might offer to help you get your economic impact payment sooner.
So, remain on alert for any requests for money, personal or banking information, Social Security numbers, or passwords. Warn older family members to not fall for these scams. And examine any checks you receive in the mail carefully, especially if they come with a requirement to call a number (or verify information online) prior to cashing.
Focus on what you can control
My last bit of advice is to stay focused on what you can control.
It’s easy to get overwhelmed as we are all navigating so much uncertainty. There are many variables that are out of our court. State reopening timelines, the nature of this new coronavirus, the path to a vaccine, airlines that may or may not be in business 6 months from now…
We cannot control any of that.
However, that doesn’t mean you have no power. Now is a good time to get clear about the things that are within your control zone. You can choose to make your bed in the morning and get dressed, even if you are only going to the mailbox today. You can exercise to keep your body strong. You can connect with family, friends, and faith.
And you can spend some of this time on your finances. That might mean making a budget, looking over your insurance coverage, or revising your investment choices. Those things are still within your control — and could potentially help you emerge from this crisis stronger.