Private Client Group
| October 17
Financial Planning During Uncertainty
The raising spectre of salary
loses have inadvertently led to rethink upon financial planning goals.With
covid-19 well underway and impacting everything from the economy to everyday
life, here are few financial planning strategies during crises.
1.Understand your budget:This
is a good time to prioritize what really matters most. As we’re all staying
home during covid-19, entertainment and food costs have greatly reduced.Beyond
essential commodities and utility bills, there has been not a single penny
spent. For households surviving on businesses, the spending habits have been
left to bleed. The ability of these businesses to employ people, pay salaries
and expand activity is curtailed, creating a negative spiral of loss.This new
normal is only temporary, getting a handle on your budget doesn’t have to be. A
solid budget can also lead to improved savings, which may be paramount if
there’s any income loss from covid-19.
2. Make sure your
protection: Reviewing insurance policies and legal documents, translating
them, and providing education about what’s currently active and what’s
available. During any period of uncertainty, this is likely the most important
aspect of your plan.
3. Importance of Liquid
savings: With the healthcare system shaken, job security is a little less
stable. It is highly imperative to boost emergency funds by reserving a pool of
cash to afford our necessities during events like downturns.
4. Avoid “Buy Now-Pay Later”-Be careful with credit card debt or better to avoid using this. It is an
unsecured debt which is expensive. Continue to pay off your dues every month in
full and do not let them accumulate.
5. Stay Invested, Don’t
Panic: The market is down, but it’s not due to a poor economy with
underlying defects. Consider keeping invested what’s invested. Losses only
occur when the shares are sold, so holding on to your investments and letting
the markets bounce back might be the best strategy. You might consider riding
the wave of the downturn to capture the coming upswing. No one knows when it
will bebut it will happen eventually.
Remember, such situation is
temporary. We will get through this together. Continue to stay grounded, stay
the course and support those around you.