Planning for Your Finances in the COVID Era – March 31, 2021
It’s been one year since Covid was declared a pandemic. What have we learned? Time-tested financial principles have served us well.
- You must have a financial plan. The plan is flexible and will change as circumstances change in your life, but it encompasses all your financial goals, including unexpected emergencies.
- Prioritize emergency savings. If you received a stimulus check in January and March, save it if you don’t have at least 3 months of living expenses socked away. Preferably, the goal should be 6 months.
- Wants vs needs. Your spending may be down vs pre-Covid. Can you make adjustments going forward and keep a lid on outlays? It’s a great way to boost your savings and prepare for the unforeseen.
- Stay on track or get back on track with retirement. Did you take a hardship withdrawal? If so, now is the time to re-engage with your IRA and 401k.
- Do you have a mortgage? Mortgage rates have ticked up but remain very low. Run the numbers and see if refinancing makes sense at this time. It could save you hundreds of dollars per month.
Bottom line
The pandemic was an unexpected and unwanted surprise on so many fronts. It upended lives.
There is much more we could discuss in the steps above.
Viewing Covid through a financial lens highlights the need for a comprehensive financial plan that incorporates surprises.
Created 2021-03-31 14:11:16