By Dave Coen
“Your Past is not your Future” – We hear that often, and it is a true statement. Our future does not have to be defined by what happened previously.
But we can learn from our past in order to improve our future.
John Maxwell, in his book “Failing Forward” said, “It does not matter if you fall down, as long as you pick up something from the floor while you get up.” The principle of learning from the past can be powerful in determining success in the future.
As we navigate our personal circumstances and the current situation in our country, and around the world, it could be a good time for us to be thinking ahead and what we can do to improve our future. We might consider what we would do differently the next time to prepare ourselves to cope should we face another similar situation, and then take some direct action.
Cash is King
Often in times like this, it is a lot less stressful if we have a reserve of cash that we can draw on to keep us going while circumstances around us change.
Just knowing that you have a 3 month or 6-month emergency fund available could reduce stress dramatically when faced with a tough economic climate. If you have prepared in this manner, then don’t be afraid to use your emergency fund if needed – this is what you planned for.
Obviously, if we have lost our paycheck right now, then this is an emergency time and survival is the first priority.
If we have surplus cash available, in times when the market is down as dramatically as it was 2 weeks ago, and even today, and if we have the risk stomach for it, now could be a good time to invest and take advantage of huge downswings in the market, even though there will probably still be a lot of volatility ahead.
More than half of Americans spend more than they make*
Perhaps now is the time for us to determine if we are one of those families spending more than they make and determine to change that.
Three Quick Indicators that would tell me which half I am in:
- Am I paying off my credit card’s balances completely each month, or do I carry a balance?
- Am I adding money to a savings account or emergency fund account each month?
- Is the balance in my checking account increasing month to month?
Let’s make a change
Here are some possible practical action steps – If I am still getting my normal pay right now, what should I do with my stimulus check?
- Pay off some debt
- Increase my emergency fund
- Invest it
- Spend it because I want to break free from mandated quarantine
About Dave
Dave Coen is a Financial Advisor with SageView Advisory and the CEO of College Planning America. Along with his retirement financial industry experience, he is a College Planning Specialist. He works closely with individuals and families to provide comprehensive financial planning that addresses all elements of their financial picture. Learn more by connecting with Dave on LinkedIn.
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