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Lauren Rebbel

Six Ways to Regain Financial Balance

Lauren Rebbel

August 24th, 2020 | Written by

6 Ways to Regain Financial Balance

There has been a lot of talk about balance over the years.  Is it truly attainable or simply a myth?  The COVID-19 pandemic and restrictions which were placed upon us, forced us to slow down and assess how we have been living our lives.

Do we want to resume our busy lives and overly scheduled calendars, or do we want to live our lives a little bit differently?

We are looking at the balance between commuting to work and productivity.  Does commuting into the office still make the most sense or do you prefer the flexibility and efficiency of working from home?

Employers, who have never offered flex time and telework options, had to adapt. They are finding balance in managing, retaining, and attracting employees who have their own set of challenges.

Parents with school age children, especially women, are learning how to multitask being a productive member of the workforce and co-educating children as many schools are reopening at least partially virtually (if not completely virtually) for the first quarter.  Many women have lost their jobs over the past few months and are trying to figure out what’s next.  Some have gone so far to call this time period a ‘shecession’ as the COVID-19 pandemic has caused the most significant job loss and further wage pressure on women. While the plates of many women are filled to the brim, balance and time must be given to self-care and personal, physical, and mental health.

Finally, investors are finding a balance between their financial goals, and their emotions, which were tested in March with the fastest stock market decline in U.S. history.  While many investors stayed the course, they were rattled and forced to think about their money and their financial plans differently.

Six ways to regain financial balance:

Replenish your emergency fund

The amount you should have in your emergency fund varies.  A good rule of thumb is that your emergency fund should cover at least three months, and up to one year, of living expenses.  Work on replenishing cash reserves that you may have dipped into over the last several months.

Review your risk tolerance

If you were scared to open your 401(k) and investment statements after March, you aren’t alone.  However, if the market downturn kept you awake at night and feeling sick to your stomach, it’s time to look at how your money is invested.  Your actual risk tolerance may merit a shift in your asset allocation to a less aggressive approach.

Continue to invest

Don’t stop investing in your workplace retirement accounts.  This is critical.  Continue to invest systematically.  Set it and forget it.  The 2020 maximum 401(k) employee contribution is $19,500 with a $6,500 catch-up contribution if you are age 50 or older.  Make your money work for you.  Start investing as early as possible and pay attention to the fees within your investments.

Ask for a raise

Many women are simply happy to have a job with a flexible work environment.  We don’t want to rock the boat and ask for more.  We don’t want to sound ungrateful, or dare I say ‘greedy.’  Put these concerns to the side and ask for a raise at your next review.  If an employee review isn’t common practice, be assertive and schedule one with your boss.  Make your boss aware of your accomplishments and why you have earned a higher salary.  The answer is “no” unless you ask.  Know your worth and speak up.  You will be glad you did, and your boss will likely appreciate and respect your request.

Get your affairs in order

Do you have enough life insurance?  Are the beneficiaries on your accounts up-to-date?  It’s time to dust off your estate planning documents and make sure nothing has changed.  If you do not have a Will or Power of Attorney, now is the time.

Engage in your family’s finances

If you’ve taken a backseat to the management of your family’s money and investments, it’s time to engage right now. Find a better balance when it comes to the responsibility of saving for your future.  Take time to understand what you have and where it is located. Get a handle on your liabilities.  It’s a great time to review your mortgage interest rate and analyze whether or not refinancing makes sense.

 

This article was originally published in the Baltimore Business Journal in August 2020

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This information is not intended to be used as the only bases for investment decisions, nor should it be constructed as advice designed to meet your particular needs. You are advised to seek the advice of your financial advisor prior to making any decision based on any specific information contained herein.
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