Times like these tend to make us reassess everything, including investment risk tolerance. Big market pullbacks are scary. The recent one was compounded by liquidity issues as people had trouble getting their money when they really needed it. It’s no wonder some are reconsidering mattress cash stashes. 

This pandemic has forced us all to reflect on what it’s like to go without pay. Whether you’re still gainfully employed or on the unemployment rolls, you can’t help but wonder how you might do things differently in the future. That’s not a bad thing.

Experian reported 78% of Americans live paycheck to paycheck. That was before an additional 30+ million people filed for unemployment. With Americans shouldering an average credit card debt of $5,700, according to the Federal Reserve, situations like these make it tough to dig out.

Changing money habits

These numbers are grim, and don’t account for what’s happened since COVID-19 made matters worse. Obviously, folks need more basic financial education. It’s time to quit spending what we don’t have. Emotional decisions should never drive financial strategies, unless you can afford to lose it all. Now’s the time to get back to data-driven, logical investment decisions.

Now’s not the time to follow internet advice encouraging fad investments or go-it-alone approaches to eliminate professional fees. It’s never a good idea to buy high and sell low, but many don’t have a current choice on the latter. What’s important is to be more thoughtful about future money decisions.  

This is a good time to seriously reflect on what you’re doing with your money. Sure, today it probably involves some crisis planning, but it doesn’t have to be that way tomorrow.

Spring cleaning isn’t only for physical stuff. Consider if past financial decisions are wise moving into the future. Where’s your money going or parked? Are what seemed like good investments at the time no longer sensible?

What you can do today

For those paralyzed by fear and uncertainty, start small. Eliminate unnecessary expenses. Craft a plan now to set emergency money aside. Talk to a professional to get some objective and expert advice.

If you came into this global pandemic with cash reserves and retirement savings, they’ve probably been depleted a bit. This a good time to reassess your investments and consider potential tax benefits from reallocating poor-performing funds. Don’t be too hasty to bail, though. History shows recovery follows retractions.  

Where ever you are, you’ll get through this. Hopefully, it will be with a smarter plan for the future that has you better prepared for the unexpected.