By guest authors, Michelle L. Taylor and David J. Rubis from Fairport Wealth*
Many of our clients have inquired about their finances during these uncertain times. To help, we asked Michelle L. Taylor, CRPC® and David J. Rubis, AIF® of Fairport Wealth to discuss some tips and strategies on managing your financial wellness during the COVID-19 pandemic.
We have entered a new era where a National Pandemic has our portfolios decreasing, we’re confined to our homes, and we are all experiencing increased stresses due to lost wages or work. The American Psychological Association (APA) reports that, in normal circumstances, over 3/5 of Americans cited “money” as their biggest cause of stress – accounting for 70-95% of doctors’ visits. That only starts to increase as you add in the unchartered territory of a worldwide pandemic. So, how can you manage your health and your finances in a time where both bring a lot of uncertainty? Control what you can control. It all starts with your P.L.A.N to protect your family.
P – Prepare for the unexpected.
Review your current financial situation and make sure you have a plan, that you’re actively executing on that plan, and that you are setting realistic expectations. Make sure you are up to date on your portfolio, income, expenses, life insurance, beneficiaries, estate plan, health care, business, education expenses, etc. If you feel you do not have a clear picture of what that looks like, or you feel you have not taken the necessary steps to put protections in place, ask your advisor. They can work with you to make sure you can still achieve all of your financial goals for your family.
L – Leverage this opportunity to talk to your family about finances.
According to the APA, 31% of Americans report that money is a major source of conflict in their relationships. Make sure you have an open dialog with your parents, spouse, ex-spouse, and children. Start setting clear financial expectations. If you have not traditionally been involved in the financial part of the relationship, now is the time to learn. You don’t want to be caught off guard if something happens to the person who traditionally takes care of the financials. Educating your family about your financial plan is one of the best gifts you can give them. It will help them feel empowered, enabling them to make well informed decisions about the finances should the situation arise.
A – Asset Allocation
As it specifically relates to your portfolio, you want to revisit and make sure you are appropriately invested in a diverse portfolio, one consisting of cash or short-term instruments, bonds, & stocks. How quickly we forget when the market is strong, we get a false sense of security. Everyone is unique in what they will need to accomplish their goals. So, make sure you find an advisor that can help review, and if needed, make the necessary changes before it is too late. Preparing for the unexpected is directly tied in with your asset allocation. You want to make sure you have enough savings to get you through 3-6 months should you lose your income. This money should not be tied to the market.
N – Needs Analysis
In times like this we need to get back to the basics and really discuss what do you need right now to keep you and your family safe. It is a good time to cut back expenses and really decide what is necessary for your day to day living. Easy places to start looking are those direct payments for services that automatically hit your credit card or your bank account. For example, now may be a good time to stop any of your club memberships (especially if they are closed), or unnecessary movie rentals. Be thoughtful of your grocery bills and family menus. What services could you eliminate for a period of time and do yourself to save on monthly expenses. Once you go through this exercise, you will realize quickly, most of your expenses fall in the “Want” category not the “Need” category.
*If you’d like to discuss the wealth and wellness of your family in these uncertain times, contact Michelle at 216-431-3898 / email@example.com or David at 216-431-2587 / firstname.lastname@example.org. www.fairportwealth.com
Securities offered through HighTower Securities, LLC member FINRA/SIPC. HighTower Advisors, LLC is a SEC registered investment advisor. HighTower Advisors do not provide tax or legal advice. This material was not intended or written to be used or presented to any entity as tax advice or tax information. Tax laws vary based on the client’s individual circumstances and can change at any time without notice. Clients are urged to consult their tax or legal advisor before establishing a retirement plan.