How to make a financial plan amid pandemic uncertainty

So far, 2020 has been unpredictable, to say the least. And it doesn’t look like the second half or even 2021 can promise a return to normal.

With everything up in the air, it can be difficult to make plans, whether it’s a vacation or even a trip to the movies. But a financial plan is one you’ll probably want to work on or revisit, especially if you’ve been impacted financially by the pandemic. And despite the uncertainty, planning could be a way to reduce some of your anxiety about the situation, experts say.

“It’s kind of taking back the control that you feel you’ve lost when you watch the world unfold before your eyes,” says Jody D’Agostini, financial planner at Equitable Advisors.

Reassess your situation

It can be hard to know where to start, so start with what you know. The first thing to do is understand how this pandemic has impacted your family’s situation, says D’Agostini. The initial questions can be quite obvious: Has a family member lost their job or is they at risk of losing it? Has anyone taken a pay cut?

This could affect how much you want to save in your emergency fund or continue contributing to your retirement (we’ll get to that in a moment).

Then get back to basics, she says. Figure out what your monthly budget is and how it may have changed as your life has adjusted to the roller coaster of 2020. (For example, many of his clients say they may never go back to work a full week of five days in the office – this will reduce the cost of work clothes).

Reevaluate your priorities

There’s so much to think about, but figuring out which expenses should remain a priority and what needs to be moved is key to not getting overwhelmed.

“There’s always information overload about personal finances,” says Mark Reyes, financial advice expert at Albert, a mobile app that helps you track your finances. “When you combine it with the pandemic and everything that’s going on, there’s a kind of sense of paralysis by analysis.”

So he says sit down and figure out what’s really important to you. Thinking of buying a car later this year? So maybe an auto fund should stay on your to-do list. Is travel a priority for you? Save for it.

Figure out what your core values ​​are and use the top three to guide your decision-making, suggests Reyes.

“A goal-based approach will eliminate a lot of the noise.”

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To start

Take care of your emergency fund

While a typical emergency fund might cover your expenses for three to six months, D’Agostini encourages people to increase that up to nine to 12 months if possible, given the uncertainty over how long. of the pandemic.

You want to make sure you have enough money to do a thorough search if you lose your current job, adds D’Agostini – “If you have a cushion of a year, you’re not going to take the first job that comes down on your plate.

Since you’ve reassessed your priorities, you may have more money to put into this fund than you thought. Maybe you have a subscription to a streaming service or a gym that you don’t use. A good place to start is to simply check your credit card bill and see if there’s anywhere you can cut or eliminate spending, says Anjali Jariwala, founder of FIT Advisors. She also likes budgeting apps like and YNAB, which categorize your expenses.

“A lot of people – until they sit down and watch how much they spend – they don’t know how much they spend or where the money is going,” she adds.

If you’ve lost your job, it might be time to tap into that emergency fund. You may also be eligible for government assistance for needs such as medical coverage through Medicaid and food stamps through the Supplemental Nutrition Assistance Program. And don’t forget to apply for unemployment benefits (most states offer extended benefits given the high unemployment rate).

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Get your things in order

Part of planning for uncertainty is planning for everything that could happen to you, so you need to make sure you have certain estate planning paperwork in place, D’Agostini says. First, a will, which will ensure that your money and other assets will be passed on as you wish. And identify an executor who will control your assets throughout the process, pay final expenses and debts, and file tax returns, she adds.

Next, identify a health care proxy who can make medical decisions on your behalf if you are incapacitated, and a power of attorney who can make legal and financial decisions (otherwise a court will be involved, which could delay access to your investments and bank accounts), says D’Agostini. A living will is also important – it sets out what medical interventions you would and would not support regarding your care so that your health care proxy can make the right decisions on your behalf.

You can also create a revocable living trust, D’Agostini says. This determines how your assets will be managed after your death, but it allows you to adjust or override the arrangements you have in place at any time. If you fund the trust now and become disabled, your successor trustee can use the funds for your care.

We know it’s a lot. If you are unable to solidify all of these documents at this time, Jariwala encourages people to at least put their Powers of Attorney in place. You can probably find a pattern online for doing this (just make sure it’s specific to your state), she adds.

And speaking of those retirement savings plans…

It can be difficult to focus on something as distant as retirement, especially if you’re stressed about basic needs like feeding your family or paying your rent. There’s nothing wrong with pushing retirement savings down your list of priorities, says Jariwala. If you can start saving again once your situation stabilizes, it won’t have too much of an impact on your long-term plans, she adds.

But for people who are still employed, you should continue to contribute to your retirement account at least up to your employer’s limit if there is one, says D’Agostini – “it’s free money for you”.

And since the amount of risk you can take in your investment portfolios may have changed, be sure to reallocate as needed, Reyes says. If you’re nearing retirement, you may want to have a more conservative portfolio (including more fixed income and cash) to protect against volatility. But for young people who still have decades to recover from this recession, stay the course, he adds.

“Stick to the plan,” Reyes says. “Have faith in the plan you have put in place.”

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