By Keith Kolomichuk

March 26, 2020

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Finances in the time of COVID-19

If there is one thing this global pandemic has shown us, it is how quickly everything can change. It seems only weeks ago we were paying attention to a democratic primary, impeachment proceedings, and tragic images from a massive earthquake in Turkey. Now there are medical professionals all over the world on the front lines of a global fight to stem a virus we have only known for a few months. In the face of uncertainty, we have a human need to try to bring some control and stability to our lives.

Here are a few steps I would start with.

Finances in the short term

We have seen how the economy can shift rapidly, and while many of you are still employed and will be for the foreseeable future, this is a good moment to make sure that you have an emergency fund. Having the funds necessary to move yourself to a new location and take care of 6 to 12 months of your basic living expenses will prevent you from having to liquidate either investments or real estate or take on debt in the face of a sudden change. Take this moment to evaluate your realistic worst-case scenario for 12 months and make sure that you have the funds to cover at least your needs.

Finances in the long term

When it comes to your long term investments, I cannot stress enough how important having a plan is. If the month’s events have you rattled, look at your plan. If you do not have a plan, consult a professional (like myself) and create one. One of the most important things to make sure we do in emotionally charged moments is to stick to our plan. If that means you are young and still contributing to our retirement, stick with it. If that means you are facing retirement and the equity side of your portfolio has taken a dive, remember that you have bonds for this very moment. We as humans are prone in these moments to make decisions that will reverberate for decades and having the framework to make those decisions is how we help eliminate our biases and fear.

Remember we have been here before

Know that the global economy has seen many historic moments before. It has been through world wars and recessions. It has seen full industries collapse and new ones emerge. What the world is facing is very real, tragic and scary. We do not know when it will end and how many heart-breaking stories we will have to tell from it. History has shown us, however, that these moments, while they change us and shape us, do pass. When they pass the world economy will start to move forward again, our investments will have more clarity, and we will gather together the pieces of our lives and make a path forward.

Crisis Pay

For the nurses out there signing up for assignments fighting this virus, first of all, thank you. The world is a better place because people like yourself are helping to save lives. On the more practical side, go into this quick assignment with a plan. These kinds of assignments can pay very well. They are also the first to go when the situation begins to clear up. One of the most prudent things you can do is save the bulk of your crisis pay. One of the best strategies I have seen executed was someone who put their entire crisis assignment paycheck into a separate account. When this assignment was over, they had saved over a year’s worth of their regular wages.

Smile

Lastly and arguably most importantly find the things that bring you life and hope and build them into your life. This is arguably important all the time but especially when the headlines are so stark and the “normal” that we had before seems like a relic of the past. I find that being with the people I love, climbing and meditating are what keep me smiling. Find what keeps you smiling and hold onto it.

We hope these tips on finances have helped you.

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Keith Kolomichuk, Financial Advisor, CPFA, AAMS
Raymond James & Associates, Inc. member New York Stock Exchange/SIPC
Address: 5285 E Williams Circle, Ste. 5500 Tucson, AZ 85711 Phone: 520-330-3652
This material is provided for educational purposes only and does not constitute investment
advice. Investing involves risk and you may incur a profit or loss regardless of strategy
selected.

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