This article was originally written on June 1, 2020.
Steve Devlin, Senior Financial Consultant with Freedom First Wealth Management, and Jason Fletcher, Financial Consultant with Freedom First Wealth Management, share their thoughts on what to do with your finances if you recently lost your job.
Have you lost your job or are you suffering through a financial hardship? Here are steps you can take to ensure your financial stability.
Step 1: Talk to an advisor about your situation
The goal is to find the best way to use the money you have available during this time with the least effect on your taxes and future opportunity. For some this means Debt (Credit Cards or the Equity Line on their Home) and for others it means Assets (Savings, Investments, or Retirement Accounts, like a 401k or IRA). The rules for withdraws from retirement accounts have been modified for 2020 due to COVID-19. At Freedom First, we have Financial Consultants that can help evaluate your options.
Step 2: Create a plan to pay back
As your financial situation improves, focus on paying down the additional debt you incurred or building up your Savings, Investments, and Retirement Accounts again. Keep your Financial Consultant informed about your situation so they can help you budget and pay back the money you borrowed or invest for your future.
Step 3: Save for emergencies
We can’t assume this will never happen again, whether due to a pandemic or economic conditions. Financial hardship may be something you face in the future. Having 3-6 months of your expenses set aside in an account for emergencies is the key to surviving financially. For most people, this will mean a separate savings account, money market, or CD. For those working with an advisor, this could also be a liquid/accessible investment account. Your Financial Consultant can guide you through the process of building the right emergency fund and investing for your future.
Financial Tip
Having an Equity Line on your home is a good idea even if you do not have an immediate remodeling or repair need. As you are faced with an immediate need for extra cash due to an emergency or home improvement, the Equity Line can act as a checkbook for instant access to the needed funds.
Investment Tip
As the markets change and we deal with the effects of COVID-19, the opportunities to invest are also changing. Today’s investor should be more mobile in their strategy to take short-term advantage of opportunities created post the COVID-19 sell off while having a year-by-year approach to reviewing their portfolio’s effect on their long-term goals. At Freedom First Wealth Management, we consistently analyze the investment we use to achieve short-term results in any market condition as part of your long-term financial plan.
Here are some links to articles offering helpful tips for those that are unemployed.
Talk to one of our Financial Consultants to help you build your Financial Plan.
- Steve Devlin, Senior Financial Consultant, Freedom First Wealth Management
- Jason Fletcher, Financial Consultant, Freedom First Wealth Management
For more information about Freedom First Wealth Management services or make an appointment, go to our website www.freedomfirst.com/wealth-management
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