What ever the future holds I believe we need to start planning for the now and also the future. With this in mind the following is crucial regarding financial planning, but will also provide a base for when when we come out the other side. I have attached a couple of templates that might help:
🌱 Get financially organised - You need to know your starting position if you are going to be able to navigate this uncharted territory. You need to get details on your assets such as cash, investments and pensions that you hold. You need to do the same for any debts such as mortgages, personal loans and credit cards. Get balances, payment amounts, interest rates and terms. You can then understand your current net worth and options you may have available to you. Also, look at speaking with providers regarding mortgage holidays and loans deferments if needed at this time.
🌱 Do a spending plan - You need to start budgeting and tracking your spending, awareness is more important than ever. This will show you what you need to earn but also where your money is going at the moment. You may have been able to defer certain loan or mortgage payments which could reduce your short term outgoings. You will also not be going out or socialising so can this money be directed elsewhere (assuming your earning capacity is undimmed)? If your earnings are affected, an updated spending plan will show you how much you will need each month.
🌱 Liquidity is key - You may have been able to defer certain payments and free up disposable income because of the restrictions in place. This will hopefully help reduce the income required but if you do have excess income it is important to direct this to the right uses. Normally this could be paying your future self by paying down debt or mortgage, however at this time I believe liquidity is key so if you can save any excess income this could be beneficial down the line. In the event that it is not needed you will have built up a Confidence (Emergency) Fund (3-6 months salary) for when we come out of this crisis.
🌱 Adapt and thrive - The world has changed and it is unlikely to be the same again, whether that is through more flexibility over working patterns or just not taking teachers for granted! Think about how you can adapt to the current climate but also how you can adapt to be at the forefront when we come out of it. Can you help support your existing clients? Can you do online courses for your work or take that temporary job to tide you over? I believe those who adapt the best will be those positioned to thrive in the new world!
🌱 Protect yourself from future risks - Most of us believe we are invulnerable or don't have to worry about protecting ourselves as "that won't happen to me". The current fact is we are more aware of our own mortality at times like this, although it will fade equally quickly. Protecting yourself and the people that matter most to you should be one of the fundamentals of any financial plan. If you don't have Life Insurance or protection for your income and there are people who depend on you financially this should be the minimum change you need to implement asap. We can help with this if you wish to discuss.
Most of these are fundamentals at any time but more so now than ever. I have added some resources below which should help you understand your current position and take control of your spending.
I recently hosted a free online webinar in conjunction with IPSE which might be of interest to you on adapting to current situation and setting financial goals. You can watch here.
