Financial Planning Strategies During a Crisis

planning finances

As the global pandemic continues to surge and with the upcoming holiday season approaching, many Americans are re-evaluating their financial planning strategies. Parents are trying to reconcile how they explain to their small children that Santa might not be able to bring as many gifts this year. In addition, many are fatigued from the struggle of being socially isolated from their loved ones along with the ongoing challenges of virtual schooling. Not only are people faced with the pressure to not participate in their usual holiday social activities, the added financial stress of the situation is palpable. 

According to a survey released in October by the National Endowment for Financial Education® (NEFE®), 84 percent of Americans indicated that the Covid-19 outbreak is causing stress on their personal finances. The same percentage have concerns about the effect the outbreak will have on their personal finances over the next 12 months. One thing that may be hard to remember during these trying times, is that eventually, this crisis will end and the economy will recover. For now, careful financial planning can help you get through this difficult time.

One of the first things you should do if you haven’t already is reconsider your budget and trim any non-essential bills. If you have done this and are still having difficulty paying bills, reach out to your creditors and see if they are offering any kind of assistance. Some credit issuers are offering flexible payments and waiving late fees in response to the crisis. One thing is certain, you need to be proactive if you want to take advantage of these programs. 

The Consumer Financial Protection Bureau has set up a webpage full of information and resources to help. If you’re having trouble paying your mortgage, the U.S. Department of Housing and Urban Development has (HUD)-approved housing counselors ready to help you out. You will find loads of information on how to protect and manage your finances and how to utilize assistance programs.

It’s also good to start thinking about the future. One thing financial planners are stressing now more than ever is the need for an emergency fund. This may seem extremely daunting especially considering that even in good times, many households live paycheck to paycheck. In fact, according to Bankrate, only 18 percent of Americans had a 6-month savings cushion. One important takeaway from the Covid crisis is that our financial planning strategy should include adequate emergency savings. Although we may not have much extra to put aside right now, we should begin planning ahead for how we will do so in the future. 


Secured By miniOrange