Hello everyone. Hope you are all doing well. For those who don’t know me I am Mark Fried President of TFG Wealth Management.
Today I want to discuss post pandemic financial planning.
Its February 2021 and last night I was able to schedule to get my vaccine which made me start thinking about what the world will look like in the coming 6 to 24 months which is our typical planning cycle.
All the families we serve know how important it is to have a financial or retirement plan especially in uncertain and changing economic environments. With a plan in place we can adjust your investment, tax and related strategies to fit current and future financial challenges.
With a million vaccines being given a day in the United States, hopefully we will be emerging from our isolation sooner rather than later.
After nearly a year of upheaval in our investments and our lives—markets crashing, then soaring; travel plans canceled, weddings postponed—we’ve all started to look toward brighter days. But remember, greater freedom to travel and entertain can come with a higher price tag.
So while we are working on your plan and your investment strategies,
We suggest that you take the time now to consider future expenses to help you make the most of the new normal when it arrives. Here are three personal strategies to get you started:
Maintain your moat. As many of us learned last year, cash reserves provide a welcome buffer in times of uncertainty. Before you leap back into old spending habits, make sure you have cash set aside in your emergency fund— The rule of thumb is to save up six months’ worth of expenses. If someone in your house has a chronic medical condition, or if you are a high-spending household, you might need to set aside significantly more.
Update your battle plan. While large numbers of people were forced to tighten their belts during the pandemic due to unemployment, others were lucky enough to improve their bottom line. In fact, Americans’ increased their personal savings rate significantly last year according the the Bureau of Economic Analysis. If your situation has changed (for better or worse), take the time to revisit your budget to make sure it meets your needs going forward. If you don’t have a budget, create one. Use our budget worksheet to track your monthly expenses and income to get a picture of your savings, spending and overall cash flow going forward. You can budget for upcoming expenses or compare how changes in income will impact your lifestyle.
Prioritize some pleasure. We know we’re looking forward to seeing friends and relatives—and palm trees—again this year. Now’s a good time to consider the travel expenses you’ll incur in the latter half of 2021 or 2022. (Lock in your itinerary while there are still bargains to be found on flights and hotels.)
If your lockdown routine helped you cut down on debt, make sure you can keep your finances on track while still accommodating your desire to live life to its fullest again.
As we like to say at TFG, Set your destination but always remember to enjoy the journey.
Until next time. This Mark Fried.
Be well and Stay Safe.