Making Financial Decisions During a Pandemic
The pandemic has normalized many things that many people might have considered strange just a few months ago. Staying home all day and owning a collection of face masks is the new norm, while eating out and traveling have become more challenging. Whether we recognize it or not, this restructuring of our daily routines can have a significant impact on our background emotions and decision making.
In fact, research has found that “ambient emotions” can subconsciously affect your decision making, especially financial decisions. The pandemic and the subsequent lockdowns have heightened fear, anger and sadness as primary ambient emotions. But being able to control and learn from these emotions can help you make sound financial planning decisions, even during uncertain times. There are even a few things you can do to reduce the impact of these ambient emotions.
Update Your Estate Planning Documents
It may be difficult to talk to loved ones about your health, especially worst-case scenarios. However, putting off discussions about wills and other estate planning documents can cause even more anxiety in the future. On the other hand, controlling the excess fear of the unknown and staying proactive in the care of estate documents can help to reduce your background anxieties.
At-risk individuals may find it beneficial to review medical instructions, a living will, or a power of attorney. COVID-19 has the potential to be very serious in certain cases, and the details of documents pertaining to health care can be extremely important. For example, those who have signed a “do-not-resuscitate” may be at risk of limited medical care from a coronavirus related illness. For example, some states classify ventilators as intubation, which is prohibited under “do-not-resuscitate” orders. In any event, it’s better to be prepared in these situations, than to be blindsided.
Consider Life Insurance – Not Just Because of the Pandemic
Life insurance applications rose substantially for most age brackets in 2020, likely due to the anxieties surrounding the pandemic. The fact is fear of losing a loved one is very real for many people. However, fear of COVID-19 should not be the only reason that you purchase a life insurance plan.
Life insurance should be evaluated as a part of your comprehensive financial plan, but before we can help to determine your insurance needs, we need to understand your financial situation in detail. At Brookstone Wealth Management, we evaluate your insurance needs as a part of your Financial Fingerprint™.
The Financial Fingerprint™ is a simple process that allows us to understand your complete financial picture. Many insurance salespeople will be happy to sell you the largest policy you will purchase whether you need it or not, but that’s not an effective way to plan your future. If you have your Financial Fingerprint™, you will understand your needs, so you can make informed decisions.
Continue to Build Savings for Unexpected Expenses
Savings rates hit all time highs in April when COVID-19 uncertainty was at its highest. Those rates have since retreated, but much of the uncertainty that drove the increase still lingers. Vaccine timelines are still undetermined, and sporadic COVID-19 flare ups could prompt some leaders to consider new lockdowns.
Those with jobs in volatile markets, like leisure and restaurants, are still very much at risk of losing more of their income to the pandemic. And with Congress at a standstill over further unemployment aid, things could get worse before they get better. Therefore, it’s still important to keep saving for unforeseen expenses or drops in income.
In addition, many Americans have made withdrawals from or otherwise changed their retirement savings during the pandemic. Although it is sometimes unavoidable to make a withdrawal from your retirement, it is critical to replace the lost savings as soon as possible. If you need help getting your retirement savings back on track, give us a call.
Brookstone Wealth Management Can Help You Make Informed Financial Decisions
A great way to overcome the anxieties and ambient emotions resulting from the pandemic is to speak to an experienced financial advisor, like Tami McDonald, CFP®, here at Brookstone Wealth Management. Tami has the experience necessary to help you stay grounded and assist you with making informed financial decisions.
If you’re uncomfortable with meeting a financial advisor in person, don’t worry. We have the technology to meet via the web, on your computer or your mobile device, until you are more comfortable with in-person meetings. If you want to learn more about how to prepare for web meetings, read our guide.
At Brookstone Wealth Management, we offer a complete suite of Wealth Management services, supported by an experienced team of financial and legal professionals. We are owned and led by women, and we focus on coaching, teaching and mentoring our clients. We’d love the opportunity to help you navigate to your True North.