How to Manage Financial Priorities During a Crisis

The Covid-19 crisis is wreaking havoc on the hearts and minds of so many of our friends and neighbors. Wild stock market fluctuations, fear of what the future holds, and the health and safety of our families are top of mind. I want to address how to manage financial priorities during a crisis, with the hope of shifting any fear and panic you might have, to calm confidence about what lies ahead.

How Important Are Those Dishes, Anyway?

Dirty dishes seem like a top priority when dinner is done. But let’s say your pants catch fire when you brush by the candle on the table. All of a sudden, the dishes are no longer your top priority. You’d extinguish your pants (hopefully, without injury) and deal with the dishes later.

Applying this metaphor to financial planning, a rapid drop in the stock market following a bad news event, or persistent negative news about a pandemic and rioting in the streets, can make short-term financial preservation feel much more pressing than long-term retirement planning.

Worry robs us of joy and peace. Certain events require immediate attention (like catching your pants on fire), and others don’t.

However, there’s a difference between quick action in an emergency and chronic worry over the unknown. If fear becomes a daily driving force, it can affect decision-making, creating long-term uncertainty with potentially disastrous results.

Keeping your eyes on the future can help you through uncertain times. I want to encourage you to keep your eyes on your long-term goals, not on the daily negative news we’re seeing during the Covid-19 crisis.

Remember Your Long-Term Plans

To enjoy today and grow assets for an uncertain tomorrow, it’s important to take care of ourselves before trying to help others. We must plan for tomorrow and at the same time, enjoy today. This balance defines the values of Carver Financial Services, and it drives our philosophy in managing your assets.

We believe in enjoying today, appreciating what we have, and cherishing our loved ones in each moment. After all, we don’t know what tomorrow might bring. Anyone could suffer a tragedy at any moment. Sacrificing today to worry is no way to live.

At the same time, planning for the future creates financial confidence, and knowing how to manage a crisis with a long-term eye on the future is key to enjoying today and achieving an independent future.

Perception vs. Reality

We must see the risks in life and deal with them rationally. Covid-19 can be dangerous; however, so is cardiac disease, which kills more than 600,000 people each year in the United States. Taking every precaution against Covid isn’t much help if a daily dose of hot dogs and cigarettes leads to a deadly heart attack.

Market fluctuations are a bit like this: volatility can cause panic, but long-term poor planning can be a death knell.

Consider inflation as an example. Losing portfolio value after a market drop can feel like a serious crisis today. Over time, though, history proves the market will come back. Conversely, failing to plan for the known eventuality of future inflation can be disastrous to your long-term financial preservation.

Do you know anyone who paid more for the last car they bought than they did for their first home? Inflation is a reality that requires careful attention and planning. It’s not a crisis today, but failing to plan for it can be a disaster tomorrow.

Confidence Through Planning

By having enough cash and fixed income on hand to meet your needs and a long-term plan to meet your future goals, you’ll be more likely to weather short-term events and create the independent future you desire.

Our Personal Vision Planning® process takes a proactive approach to rebalancing your portfolio based on your changing needs and market opportunities while working to minimizing expenses, income tax, and volatility at the same time. 

This is a dynamic process guided by your needs, objectives, and risk tolerance rather than market movement or media hype. It works in tandem with your other advisors, such as accountants and lawyers.

As the pace of change continues to accelerate and media hype scratches on your nerves, it’s more important than ever to work with a trusted financial advisor in maintaining and enhancing your lifestyle.

Let’s Talk About Your Future

I’ve been in the financial services industry for more than 30 years. I can say without hesitation that now more than ever, competent professional financial advice is a must-have. And in an increasingly impersonalized and automated world, I believe having a personal relationship with your financial advisor is key to achieving financial confidence.

If you already work with us, we are humbled to be your partner and appreciate the confidence you have in what we do. If you are not a client and would like our insight on your current financial plans, please get in touch. You can reach me directly by email here or call our office at 440-974-0808.