By Cliff Taylor & Erik Milam, Partners
William Bridges wrote “Because transition is a process by which people unplug from an old world and plug into a new world, we can say that transition starts with an ending and finishes with a beginning.” Right now, we are all experiencing transition, and its common companions: stress and fear. Never-before in our lifetimes has a health crisis and economic decline been so intertwined. It is tragic so many people have lost their lives, and over 20 million have lost jobs. Everyone is facing their own version of this reality, from COVID-19 health concerns, loss of income, balancing work and home responsibilities, to a business being challenged in ways never imagined…the list goes on, and on.
We believe financial planning is vital in all seasons, and especially in times of transition. A dynamic financial-planning process that aligns your values and money can offer direction and solace through volatile times. During times of stress it is most beneficial to make short-term decisions within the context of long-term financial goals, whenever possible.
Every situation is unique and the best decision for one person may not be the same as their peers. A financial planner can be a useful sounding board to help address your unique financial fears, threats, and opportunities. Meaningful conversations between client and planner support the process of differentiating between fears and actual threats. Both deserve caring attention, but fears do not always warrant action. Discussions with a financial planner can lead to solutions that may relieve current stress and prevent financial mistakes with lasting effects.
Identifying priorities and timeframes for decisions reduces overwhelm and establishes a useful framework to set yourself on a path toward peace. One way to start this process is to complete a brainstorming exercise where you call out what needs to be addressed for your personal financial well-being. Once you have your list, try prioritizing it into three categories: now, soon and later. Some examples of these might be:
now: employment viability, emergency fund, update estate plan, cash flow planning/liquidity needs, government benefits
soon: investment portfolio (to adjust or not), balance sheet review, tax strategies such as tax loss harvesting and qualified plan contributions.
later: charitable giving, adjustments to retirement and savings strategies.
The COVID-19 crisis is difficult to manage and requires perseverance. Times of adversity, be it personal or financial, provide opportunities for growth and positive change. Extreme social distancing has allowed for many of us to reflect and refocus on the things that matter most. These core values are the foundation on which to build your life and financial strategies. In this time of reflection, what do you want to change about your life and money going forward?
Even if you cannot address all your renewed life goals at this moment, make sure to write them down using the now, soon, and later framework. If you find yourself in a situation where you feel now is the time to begin planning for a brighter future, we encourage you to reach out to TrustCore for help. We will walk alongside you to address pressing issues, while working to build a bridge towards a long-term plan to achieve lasting financial satisfaction.