Maybe your days are filled with trying a new telemedicine software from home. Maybe you are filling a demanding and critical role at the hospital. Perhaps you’re just waiting around because most of your appointments have been canceled. It’s possible you come home to an empty house that feels excessively lonely. Maybe you are trying your hand at homeschooling. You might be spending way too much time on social media, news or home shopping sites as you look around at projects that could be done.
As I try to think about how my family will remember this time, I want to position ourselves to have memories of resilience and togetherness. That can take the form of choosing to look the other way when my daughter sets up her own “desk” in my office that is normally off-limits, allowing the kids to share bowl after bowl of Frozen cereal in the living room while wearing only their underwear, enjoying a glass of wine with my spouse, or taking very l-o-n-g walks around the neighborhood searching for bears in windows.
This is also the time for opportunists to make financial progress. Instead of turning on another Netflix show or perusing the daily shopping deals, these five financial moves instead. Trust me, you’ll feel better for it.
1) Don’t be a drunken sailor: This first one isn’t so much about doing something as it is about not doing something. I’m not usually one to get distracted by flashy headlines, but this one on MarketWatch made me laugh and incited a click. When it comes to your investment strategy in this very uncertain time, I encourage you to consider two of my favorite points from this article:
a. “Maintaining a long-term time horizon is paramount: Every investment decision we make is from the perspective not of tomorrow but three- to five years from now.” Or more.
b. “A client asked, why not wait until things settle down, when this irrationality has stopped? My response was, would you rather play poker against professional poker players or drunken sailors? “Drunken sailors, of course!” he retorted. When fear rages, time horizons are squeezed to nothing, and portfolios are liquidated because people were overleveraged to the hilt, the market is awash with drunken sailors. This is when you want to invest. You have to accept that every (buy) decision you make will look “wrong” the very next day, but that is par for the course.”
No one knows the future, but avoid the temptation to become a stock/fund trader by trying to sell before you lose any more and then predict when to get back in. It’s incredibly hard to do and likely that you will do more harm than good. See number four to learn more.
2) Review your spending habits: Has there ever been a better time? Take a look at the last 2-3 months. Do you have a black hole of spending? There is nothing wrong with meals away from home, your favorite warehouse shopping center, or coffee shops. It’s only a problem if it’s a problem. There should be no shame in revealing the truth, only in continuing to live in obliviousness.
3) Freeze your credit reports: For all the talk I hear about maintaining good credit, an essential step is freezing your credit reports to protect against unauthorized access. I was nearly the owner of new Walmart and Phillips 66 credit cards because of the activity of an identity thief 2500 miles from my home. It was credit freezes that prevented this criminal from using my personal information to their advantage. Credit freezes are free and are accomplished by visiting the websites of each of the three major credit bureaus.
4) Read a personal finance book or two: A couple of my favorites for relative beginners are The Total Money Makeover by Dave Ramsey and The Elements of Investing by Burton Malkiel and Charles Ellis. While I don’t agree with every single point made by Ramsey, his ability to bring households into financial solvency is second to none.
5) Draft a financial emergency plan: If you aren’t currently holding six months of liquid cash reserves, take time to write down your options if you were suddenly without income. Filing for unemployment or disability benefits, utilizing community services (far better to access a local food pantry quickly and still be able to pay rent/mortgage later), calling creditors to ask about hardship programs, identifying how much income a less than normally desirable job could generate, prioritizing restricted cash sources such as retirement accounts or cash value of life insurance and even identifying friends or family who could be resources in a time of need. This is definitely the time to get a long-term disability policy in place if you have been waiting to get around to it. I don't sell insurance and have no financial relationship with insurance agents, but I can help you find a policy from a reputable company. Having a concrete contingency plan helps manage anxiety associated with the unknown. I’m not promising that this will be the least bit fun, but it’s worth every minute.
Sometimes the hardest thing to do is nothing. It makes us feel out of control and uncertain. But there are so many things we can do right now to have improved our lives when this is all over: completing the financial items listed above, exercising more, connecting with old friends, finishing a book that has been around collecting dust, trying new recipes, cleaning a too-stuffed closet, organizing digital photos, etc. One thing right now is certain. It’s time to get off the couch and get to it!
Special thanks to my dear friend Dr. Carroll for allowing me to use the photo of her embarking on telemedicine day two.
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