As the U.S. and other countries work to re-open their economies in the continuing wake of the COVID-19 pandemic many people are looking forward to getting back to normal – to dinners out with friends, crowded football stadiums, and full church pews. Although things are re-opening, it will probably not be back to normal as we knew it, but forward to a new normal. The massive job layoffs, permanent business closures, and work from home practices not only resulted in belt-tightening, but for many a re-assessment of what we need or want for ourselves, our families, and our businesses. While some employees are anxious to get back to the office and the collaborative environment it offers, others have gotten used to a more laid-back, remote work environment and are asking their employers for options to continue working remotely, either full-time or at least part-time. Companies are trying to assess the costs/benefits of remote work including the impacts on productivity (positive or negative) and their need for office space. 

What does COVID-19 have to do with financial planning? Potentially a lot, depending on your perspective. One important takeaway from the pandemic is the need to completely reassess your goals and the resources needed and available to help attain those goals. This is a foundational component of holistic financial planning. Certified financial planning professionals help their clients clearly articulate their goals in concrete, rather than abstract, terms and then reduce those goals to writing and prioritize them. One of the very first goals should be an adequately funded rainy-day reserve. Millions of people had to dip into their cash reserves or even their long-term savings over the past 18 months when their incomes dropped or evaporated. Unfortunately, many realized only too late how essential an adequate rainy-day fund can be. Heaven forbid we have yet another event (such as the recent events of Hurricane Ida that decimated the coastal towns of Southern Louisana and left New Orleans and parts of Southwest Mississippi without power for weeks) that results in the loss of your income, but if we do, will you be able to survive it without significant financial sacrifice or forgoing cherished goals such as early retirement or giving to favorite causes? If the bulk of your long-term savings were invested in equities (possibly a prudent thing to do depending on your situation) but you held inadequate cash reserves, you might be forced to sell during a market correction. At the point of greatest opportunity (that being when stock prices are down) instead of buying, you were selling to cover your expenses. These are the types of mistakes that result from inadequate financial planning or advice, and from which it may take years to recover. Sadly, that is what happened to countless under-prepared families during the pandemic.

After months of social distancing, many are now finding that time spent with loved ones is more important than other goals for which they had been saving. For example, an increased travel budget to visit family and friends or host extended family vacations might replace saving for a second home. Some people’s goals remain as simple as a comfortable and dignified retirement. Retirement may mean different things to different people – what does it look like to you? How much will those (potentially thirty) years cost when adjusted for inflation? For others, their goals may be to help pay for their children’s or grandchildren’s college education, including all the frills. Knowing what four years at a public university will cost 10 to 15 years from now, adjusted for inflation, and comparing that to the potential costs of a private university is an eye-opener to many. Better to understand these costs now, while you have time to plan and prepare. These are just a few of the benefits derived from financial planning. Another benefit? Having a professional, experienced team in your corner to advise and hold you accountable and act as a sounding board when your goals change or when you start to lose sleep due to volatile market conditions. That dedicated team will also help ensure your funds are prudently invested to increase the probability you will have the resources required when needed; they can also help you transition resources to the next generation or favorite causes. This is all a part of holistic financial planning and professional asset management – accountability, advice, and expertise. Millions of families are currently partnered with teams of financial professionals whose experience and dedication to their clients allows those clients to get on with the business of living. If you have not yet partnered with a holistic financial planning and professional asset management firm, you might consider it as a part of your new normal.

Sam Taylor, CIMA®, AIF®, CRPC®

Wealthview Capital, LLC