Top Tips for Navigating the New Financial Planning Reality

The ups and downs of our health and wellness, coupled with an economic rollercoaster, have made this year a big challenge in many unaccustomed ways. This is the time to pivot, adjust, and adapt to the new circumstance and re-evaluate your financial status.  

If you want to maintain financial well-being in times of crisis, here are the top tips for navigating the new financial planning reality.  

An emergency reserve will be vital in the worst-case scenario: 

While things have been tumultuous in the market largely because of the COVID pandemic, most Canadians are still gainfully employed. However, if things carry on like they are, we could see many people out of work. To get ready for the worst-case scenario, move as much money as feasible into an emergency savings account. This account is where you can access money for expenses in the event you lose your job.  

Here are a few ideas for building your emergency reserve: 

Cut down spending: Start by reducing your spending on entertainment, shopping, and dining out. Prepare meals at home & find more productive ways to make use of your time (exercise, read, volunteer). 

Cancel subscription services: Monthly subscriptions are very expensive, so cancel them keeping the current crisis in mind. 

Stop building charges on your credit card: If you carry a balance on your credit card, you are squandering money on finance charges. Only place new charges on your credit card if you know you can pay it off in full at the end of the month.  

Eliminate or decrease optional payroll deductions: Your paycheck stub shows deductions, including optional benefits. Talk to your HR department about which benefits you could eliminate or decrease to increase the amount of your take-home pay.  

It is time to reassess your insurance coverage: 

While stuck at home, now is an excellent time to reassess our insurance coverage. You may consider having private insurance coverages: disability insurance, life insurance, and long-term care coverage. Consumers usually assume that the insurance coverage offered by their employers is adequate. What they fall short to realize is that these coverages usually don’t cover them when they leave their employer. Also, in several cases, the coverage provided by the employer while employed isn't sufficient.  

If you are not sure how to navigate the new financial planning reality during this uncertain time of COVID, feel free to contact a certified financial planner.       

Disclaimer: The information in this commentary is for informational purposes only and is not meant to be personalized investment advice. Please contact your investment professional for investment advice and before investing in any product. ACPI does not publish market research and Sunil Chugh is not registered as a research analyst. The content is from sources believed to be accurate and the opinions expressed are those of the author and do not necessarily represent those of ACPI

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