Some things to consider when reviewing your financial goals in the age of COVID-19
Based on a TD Newsroom article published July 16, 2020
No matter what your financial outlook is, it's always a good practice to take a moment to revisit your financial plan after any major life or financial event to make sure it's reflective of your changing needs and situations.
How to start re-examining your financial future
Before you look to the future, make sure you know your current situation. You may find it helpful to do a full self-assessment of your finances. That means looking at how your income and savings may have changed over the past few months, as well as the status of any loans, mortgages or lines of credit.
You'll also want to take time to determine your financial priorities to help you adjust your plan, making sure that it's realistic and is in line with your lifestyle – especially if your lifestyle or daily routine has changed because of the pandemic. You should decide what's important to you and your personal circumstances and adjust your plan accordingly.
Some things to consider: Are you mostly focused on paying down debt or is saving money to establish an emergency fund top of mind for you? Or are you working towards a long-term financial goal like planning for retirement or buying a home?
It's okay to not have the answers to these questions right away, or to not be able to tackle them all at once but knowing what your financial objectives are is important to being able to work towards meeting them in an actionable and manageable way. That's where a financial advisor can help. They can help you figure out what to prioritize and how to create a realistic plan that can help get you where you want to be, financially.
How can you prepare your finances for the unexpected?
While some Canadians are returning to work and starting to resume the routines, they had before the COVID-19 pandemic, or a version of those routines, for some, the future can still feel uncertain. So much has changed in the past few months, and we may continue to see changes for some time. The best thing you can do is prepare for the unexpected as best you can. Developing a monthly budget to monitor your expenses is one of the leading ways to prepare for the unexpected. Look at where you're spending your money and separate your spending into needs – such as food and housing costs – and wants – such as entertainment and eating out.
Saving money in the best of times is challenging, but during a pandemic it's even more difficult
If you've been able to save some money during this time, it's a good idea to put some of that savings away for that unexpected 'rainy day'. If you can afford to, consider setting aside as little at $25.00 each month to start building an emergency fund. You'd be surprised to see that over time, this can add up and help ease the burden of unexpected expenses. Once you are comfortable with the amount saved in your emergency fund, you can turn your attention to planning for different life events longer term savings goals, whether that's buying a home, funding education or saving for retirement.
Although evaluating your finances and adjusting your plans may seem daunting, by making it a habit to revisit your budget and savings plan often, you can feel better prepared for unexpected circumstances should they arise in the future.
This content discusses current topics of interest in a general and informational manner only and may not be appropriate in all circumstances. Please ensure that you seek advice personalized for your situation from the appropriate professional, consultant or subject matter expert on the topic of interest to you.
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