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Stay on Track, Continue to Give to Others

Stay on Track, Continue to Give to Others

| April 14, 2020
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The coronavirus pandemic has created a very uncertain market environment right now. However,
your long-term financial goals are probably still the same: buying a house, getting your kids
through college, starting your own company, giving back, and retiring on your own terms.
The path towards those goals might have swerved a little in the past few weeks. But if you are
still working and your income hasn’t been disrupted too severely, these four tips will keep you
heading in the right direction.

1. Re-budget.

The pitfalls of online shopping haven’t changed just because you’re ordering essential supplies
and food in a crisis. When (mostly) everything you want is just a click or swipe away, it’s all too
easy to buy everything. You might think you’re spending less just because you’re not going out
for meals and entertainment right now. But if you’re not keeping track of your clicks, you won’t
really know until you get your credit card bill at the end of the month.

A little bit of planning and budgeting can spare you a major spending shock. Take stock of what
you really need before logging into your shopping account. Schedule a week or two of meals so
that you’re not ordering out every other night. And think before you click on every discounted
movie, online class, or entertainment subscription that pops up on your screens.

Also, take a hard look at any subscriptions and extracurricular activities you won’t be able to use
during social distancing. Call up your local theatre company, your kids’ soccer team, your gym,
and see what options you have for recurring charges or fees you’ve already paid. You might
want to keep supporting some of these organizations, especially if they’ve moved their content
online. Others might be costs you’re better off recouping now if possible.

2. Build up your emergency fund.

Ideally, your stay-at-home budget should be less than what you’re used to spending in a typical
month. For most folks, the best use for extra funds is to build up your emergency savings
account. Even when interest rates are low, we recommend that you have enough money set aside
to cover six months of your living expenses. That reserve could be critical in this crisis,
especially if there’s a sudden health issue or necessary home repair.
Once we get to the other side of this crisis, a healthy emergency fund is going to be an important
cornerstone of your retirement plan.

And if what you’re saving on gas, daily Starbucks, and twice-weekly carryout lunches is getting
swallowed up by your online shopping ... Take another look at that budget.

3. Give responsibly.

It’s been inspiring to see communities rally around restaurants and other small businesses that
have adapted to social distancing. Many of these establishments have implemented contactless
delivering or curbside pickup, which keeps customers safe and helps business to go on as best as
it can. People are also buying gift cards and donating to funds that support the newly
unemployed, charitable organizations, and health care professionals.

We’re glad that the pandemic has inspired charity and goodwill in so many people. But
remember that giving is still spending. If going out to dinner three or four nights every week
would hurt your normal budget, delivery will do the same. Buying every gift card and donating
to every cause could throw off your budget just as easily as overspending on groceries. Even
your best intentions need to have limits.

4. Explore your options.

Once you’ve covered your basic needs and emergency savings, there are other things you should
consider to stay on track for your long-term financial goals:

●Under the new Coronavirus Aid, Relief, and Economic Security (CARES) Act, married
couples could be eligible for more than $2,400 in tax rebates, depending on their income
level and number of dependent children.

●The CARES Act also established loan programs for many small business owners if you
need help covering essential expenses.

●Younger investors might find opportunities to invest at a discount. Older investors might
want to reallocate to cash and bonds.

●Interest rates are low, so it could be a good time to look into refinancing your mortgage.
You could also investigate home equity credit lines and mortgage deferment options.

● If you’re really struggling to make ends meet because of the pandemic, it might be
possible to tap into some of your retirement assets to help you through the next couple
months.

We’ve been hard at work sorting through all of these details, as well as other options that we
believe could benefit our clients. Let’s have a conversation about how your monthly budget is
adapting to the pandemic, and how we can help you keep moving towards your financial goals.
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