Pre-COVID money was flowing like water and life was good for the average household. Businesses were booming, employment was stable and disposable income allowed for a robust non-essential lifestyle. The pandemic was a season of financial surprise and demise for persons without a financial safety-net in place.
Imagine being abruptly terminated from your job without cause and unrelated to your job performance. Employers were forced to make hard staff reduction decisions and, in some cases, closing the doors to their companies. Early retirement with a pension plan was the answer for some while others walked away empty handed with possibly a 401k plan and no health or wealth benefits. Can you relate to this real-life scenario, or do you know someone who has gone through this trial by fire?
Stories of person’s living out of their 401k employer plans have become common. Employed today, no paycheck tomorrow left persons desperately tapping into savings accounts and taking the tax hit and penalties on their 401k plans if under the age of 59 ½. No one saw this pandemic coming and wreaking financial havoc on our society. What can we learn as we live through these financially unparallel times? Have you heard of hurricane plans, flood plans, tornado plans and disaster preparedness plans? Consider adding the financial game plan to your readiness toolbox.
A financial game is the foundational pillars of our household and passes the test of time and circumstances. A sound financial game plan may include but is not limited to eliminating debt, strategizing your income in case that stream is disrupted, keeping a roof over your head and planning for our children’s future. In addition, consider a plan to grow money through various options such as mutual funds, stocks and real-estate. Some of these options can involve risk; therefore, seek professional, certified and licensed guidance.
Learn about the various streams of income: Active Income, Passive Income and Portfolio Income. Be smarter about how we use our time and money. The value of multiple streams of income is not just a cliché but a reality. Evaluate your money cycle. Are you on a spend cycle or a grow-save cycle? We work hard for our money and of course we want to enjoy the fruitages of our labor. Financial education is a bridge that helps us make wiser money choices to protect ourselves and our families.
Take the time now; post COVID to reflect on what you can do now to prepare yourself and your family for events that may impact you now and years to come. A life with financial confidence is possible.