Monday, May 25, 2020
The effects of COVID-19, although strange, are real. Many Americans are financially unprepared, despite their economic status; whether someone is poor, rich, or in between, COVID-19 has put the world into a panic, especially America. The good news is, with all of the time you have to spend at home, you can finally address the financial projects that you have been putting to the side. If you do decide to tackle your financial projects, you should be made aware of these five common mistakes that people make during the global crisis.
Mistake 1: Making Emotional Investment Allocation Decisions
If your balance goes down, view it pragmatically and don't make decisions based off of emotion. Remember how and why you made your portfolio in the manner that you did.
Mistake 2: Not Actively Building An Emergency Savings Account
It is very important to build an emergency savings account that is NOT for large purposes. In this account you should keep three to six months of living expenses.
Mistake 3: Not Talking To A Financial Planning Professional
Talk to a professional' they will help you make informed decisions and not emotional ones. Even though google is helpful, most people lack the specialized knowledge needed to build a successful financial plan.
Mistake 4: Assuming Estate Documents Are Adequate
Get with an attorney that specializes in estate planning to ensure that your documents are adequate. It may be uncomfortable, but all of us may face the dangers and risks of the pandemic and prepare for ourselves as well as our family.
Mistake 5: Skipping Annual Reviews With Your Financial Advisor
It is important to stay engaged in your financial world, so do not skip meetings!
See Meredith Moore, Five Common Financial Mistakes To Avoid During The Pandemic, Forbes, May 22, 2020.
Special thanks to Jim Hillhouse (Professional Legal Marketing (PLM, Inc.)) for bringing this article to my attention.