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Financial Tips for 2020: Experts Share Best Money

So far, 2020 has been a year that no one could predict. Experts share four economics lessons from this unpredictable time.

It is quite fair to say that no one could have predicted the events of this year to provide economic tips for 2020 that would have all families covered. From a global pandemic to a nationwide lockdown to mass demonstrations in support of anti-racism and social justice, many of us are experiencing a tumultuous and life-changing year – and that's only half over. We have learned new terms such as "social distancing" and "quarantine pod." We have become experts at working from home and teleconferencing with friends. We have (mostly) started wearing masks to protect ourselves and others, whether we go to the grocery store or take a walk in our neighborhood.

Many of us handle our money differently, especially if we spent the first part of 2020 fired, redundant or just worried about what might happen to our income in the future. Can we use what we have learned about money by 2020 when we are in the middle of summer to help us make better financial decisions? We reached out to three financial experts to learn what money goals people should prioritize, how to navigate the uncertainty surrounding investments, why real estate planning is necessary, and how their financial advice has changed during this unusual – and unpredictable – year.

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Emergency funds are more important than ever

If there is one financial tip for 2020 that all three of our financial experts agreed on, it is that emergency funds are important for financial success. "We have all been reminded of the value of maintaining adequate emergency savings," said Brendan Willmann, CFP® Professional at Granada Wealth Management. Sam Dogen, aka Financial Samurai, told us that having a six-month emergency fund is "crucial", especially if you are worried about job losses or stock market fluctuations.

Emma Leigh Geiser, a personal finance coach who blogs about the intersection of finance and health care at Nurse Fern, advises everyone to prioritize saving as much money as possible, even if it means putting pressure on other major financials cases such as debt repayment. "Go back to paying the minimum amount of debt, put any extra money that would have gone into debt safely into a savings account, and when things go back to normal, the money can be transferred to your creditors." (Geiser is not the only person advocating that you pay the minimum amount of debt, btw – Suze Orman, Rachel Cruze and Shannah Compton Game have all shared a similar feeling.)

The coronavirus pandemic taught us that we may have to spend a longer time to live on what we happen to run out of, whether it is food, toilet paper or emergency savings. Many of us will put some extra rolls of TP in our lockers this summer – and we should also put some extra dollars in our emergency funds.

If there is one thing that all three of our financial experts agreed on, it is that emergency funds are more important than ever.

Decline in the stock market? Do not panic

Having a robust emergency fund in place can help you cover the costs of an unexpected job loss, hardship or lockdown, but it is not the only reason to set aside six months' expenses. A solid cash reserve can also prevent you from making panic-driven decisions during stock market downturns. "The more money you have, the less you will feel the need to sell panic at an unprecedented time," explains Dogen.

This is especially important for people during the second half of their careers. If you are approaching retirement, selling your investments at a loss can seriously damage your ability to finance your golden years. Younger people may continue to invest with a growth mindset even during a bear market, but older adults may want to consider balancing their portfolios to avoid risky investments. "Many investors did not feel the need to balance their portfolios in recent years because the past has been strong," explains Willmann. "The market's downturn this spring has prompted the approaching pensions to reconsider the risk associated with their investment allocation."

Willmann also advises everyone to keep their emergency savings completely out of the stock market – even during the bull markets. "A real emergency fund should be held in an FDIC-insured account to reduce the risk of head loss."

Career fluctuations occur. Be prepared.

The coronavirus pandemic taught many people that their jobs, careers, and small businesses were not as secure as they once thought – even though they worked in an important industry. "I have personally learned that even the most recessionary work is not guaranteed," Geiser said. "As a nurse, I faced hard days and know many others who were left indefinitely when medical offices and surgical centers closed."

In the future, more of us must be prepared for career fluctuations, job jumps and periods of unemployment. If you are lucky enough to be hired, do your best to build the kind of professional reputation that can either help you keep your job during company restructuring or take you to the next phase of your career. "It is more important than ever to stay visible in the workplace and try to add as much value as possible," advises Dogen. Jobs can come and go, but added value always looks good on a resume.

"It is more important than ever to be visible in the workplace and try to add as much value as possible."

—Sam Dogen, Financial Samurai

Property Planning is the Key

The pandemic has taught many of us how to work from home with children and the importance of supporting local businesses – not to mention the fragility of life itself. "Unfortunately, the coronavirus has also served as a reminder to stay up to date with property planning," says Willmann. "Namely, your will and power of attorney." It is much easier to create a will (which includes the ability to write a living will and set up a power of attorney) than many people realize, especially if they work with a reputable digital company such as Haven Life Plus partner Trust & Will. [19659005] Willman also notes the importance of setting up a life insurance policy, even during an economic downturn – and if you already have a life insurance policy in place, it's worth asking yourself if you need to update your beneficiary's. Incomplete or outdated property planning documents do not help protect the people you love, so take a few minutes today to get a free life insurance quote, start the will management process or investigate a revoking living trust. By making the preparations now, you will ensure that you and your loved ones are as prepared as possible for what happens next year 2020 – whether it is a recession, a second wave or something that neither of us could have expected U.S.

Our Editorial Policy

Haven Life is a customer-centric life insurance agency supported and wholly owned by the Massachusetts Mutual Life Insurance Company (MassMutual). We believe that navigating life insurance decisions, your personal finances and general well-being can be refreshingly easy.

Our Editorial Policy

Haven Life is a customer-centric life insurance agency supported and wholly owned by the Massachusetts Mutual Life Insurance Company (MassMutual). We believe that navigating life insurance decisions, your personal finances and general well-being can be refreshingly easy.

Our content is created for educational purposes only. Haven Life does not support the companies, products, services or strategies discussed here, but we hope they can make your life a little less difficult if they suit your situation.

Haven Life does not have the right to provide tax, legal or investment advice. This material is not intended to provide and should not rely on tax, legal or investment advice. Individuals are encouraged to seek advice from their own taxes or attorneys.

Our disclosures

Haven Term is a term life insurance policy (DTC and ICC17DTC in some states, including NC) issued by the Massachusetts Mutual Life Insurance Company (MassMutual), Springfield, MA 01111-0001 and is offered exclusively through Haven Life Insurance Agency, LLC. In NY, Haven Term is DTC-NY 1017. In CA, Haven Term is DTC-CA 042017. Haven Term Simplified is a simplified life insurance policy (ICC19PCM-SI 0819 in certain states, including NC) issued by C.M. Life Insurance Companies, Enfield, CT 06082. Police and rider form numbers and functions may vary depending on permit and may not be available in all states. Our agency license number in California is OK71922 and in Arkansas 100139527.

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