Planning your Financial Future During COVID-19
While a lot of people are feeling uncertain about their future in the midst of the COVID-19 pandemic, there are some steps you can take to make sure your financial future is as secure as possible. It is important to stay focused on the long term strategy and stick to your plans as best you can.
Make Sure Your Affairs Are in Order
This is something you should make sure is always up to date, even when we are not in the middle of a pandemic. Make sure all of your affairs are in order – gather all important documents in a folder and review your estate plan. Make sure your beneficiaries are all designated and you have an updated Last Will and Testament. Review your financial accounts for accuracy in type and title of account and consider setting up a family trust and a medical and/or financial durable power of attorney. You should consult a tax attorney, estate planning attorney, or your CPA in regards to all of the above.
Review Your Income and Budget
Review your monthly income and budget, as well as how much money you have in savings. Compare your income versus what you are spending each month. If you have lost some of your income due to the pandemic, it might be beneficial to cut back on things that aren’t essential, such as monthly subscriptions or eating out.
Make sure you are continuing to make payments towards your debt. You want to come out of this pandemic with a good credit score, so try not to skip payments. If you are having trouble making your monthly payments, a lot of credit institutions are willing to work with you. If you call and explain your situation, you could possibly get a deferment or forbearance on your payments.
Look at Possibly Refinancing Your Home Loan
Mortgage rates are at historic lows. If you are having budgetary problems, it might be worth it to look into refinancing your home loan. By refinancing, you can possibly lock in a lower interest rate, which would lead to a lower monthly payment. Something to keep in mind is if you do refinance, you will likely have to pay closing costs, which can add up to thousands of dollars. It is important to consult your mortgage banker before deciding if refinancing would benefit you.
Review Your Budget Again in 90 Days
After 90 days of living with your new budget, review it to see if everything is on track or if anything needs to be tweaked or changed. It’s possible your financial situation has changed or that you allocated too much money to one category. The great thing about a budget is that you can change it as needed; it is not set in stone. Review all of your income sources and spending categories and see what changes (if any) need to be made based on your current situation.
Have 3-6 Months Worth of Living Expenses in an Emergency Fund
In case of job loss or financial hardship, we always recommend having 3-6 months worth of living expenses available to you in a cash savings account or cash equivalent. This has proven to be valuable especially during the COVID-19 pandemic.
If you don’t have much in savings, don’t panic. There is no time like the present to start. Even if you are putting $25 a week into a savings account, it will grow over time. It is important to keep your savings in a separate account that is easily accessible if needed.
Don’t Stop Investing
Whatever you do, don’t stop investing! Some of the most successful investors are those who take advantage of trying economic times to build their portfolio. If you have any questions, please reach out to your Carty Co. financial representative. We will be happy to help.
Stay in Constant Contact With Your Financial Representative
It’s important to stay in constant communication with your financial representative. Not only can your financial representative help you to manage your assets and investments, but they can also help you if you get into a tight financial situation. We can help create contingency plans, possibly reduce loan payments, connect you with legal help to review and revise wills and trusts, make your assets more readily available, and more.
Something important to remember is that the economy is bouncing back. Yes, it took quite a hit during the pandemic. However, there are promising signs that this is only temporary and that everything should bounce back in a timely manner.
If you have any questions or concerns at all, please feel free to contact us. We look forward to hearing from you!
The commentary is limited to the dissemination of general information pertaining to Carty & Company, Inc. This information should not be used or construed as an offer to sell, a solicitation of an offer to buy or a recommendation for any security, market sector or investment strategy. There is no guarantee that the information supplied is accurate or complete. Carty is not responsible for any errors or omissions, and provides no warranties with regards to the results obtained from the use of the information. Nothing in this document is intended to provide any legal, accounting or tax advice. This information is subject to change without notice and should not be construed as a recommendation or investment advice. You should consult an attorney, accountant or tax professional regarding your specific legal or tax situation. Carty & Company is a registered broker-dealer, member FINRA and SIPC.