Building a Post-Pandemic Financial Game Plan

Is it time for your personal “come back” plan? The COVID-19 pandemic has impacted all of us in many ways. From personal tragedies, isolation and stay-at-home orders, to job loss or trying to juggle work and school, it has been a very difficult time. If your household finances suffered as a result of the pandemic, now is the time to take steps to get back on track. MSA is here to help you create your financial recovery plan.

Budget
Especially if your household experienced a change in income, build a budget to fit your current situation so that you spend less than you earn. Prioritize your housing expenses, food, and essentials like medication, insurance or car expenses. If things are tight, anything non-essential can be considered to be cut out or reduced. To make sure you never miss a payment for essential items, consider setting up automatic payments for household bills like rent or mortgage payments, and utility bills.

Emergency Savings
Prepare for the unexpected and start building dollar-by-dollar to set aside emergency savings of at least $500, then build to $1000. Keep adding to your savings until you can cover a month’s worth of expenses with the longer-term goal of covering 3-6 months of expenses if an emergency arises.

Avoid or Pay Off Debt
If you can pay your bills but have fallen behind, contact your creditors and ask for help. There are assistance programs in place to help with bills like rent and utilities, and individual companies and creditors are often willing to negotiate. If you can, pay more than the minimum on debt payments every month.

Get Your Retirement Savings Back on Track
During the pandemic, many people had to take retirement withdrawals to cover living expenses. If your situation has stabilized, consider paying back any money taken out of retirement accounts, if you can. For details, see Coronavirus Relief for Retirement Plans and IRAs at irs.gov. If you’ve taken a withdrawal but can’t put the money back, consider a plan to contribute as soon as you possibly can and calculate how much you can reasonably contribute each month. If you can, it might make sense to cut other expenses in order to build retirement savings that were lost. Time is generally on your side when it comes to retirement savings. If you can, start early and contribute often, especially through an employer sponsored retirement plan.

Check Your Credit Report Regularly & Review Your Credit Score
If late payments or other issues impacted your credit report, understand the factors that go into your credit score, take steps to improve your score if needed, and carefully review your credit report for any errors. The largest factor in your credit score is your payment history. Getting into the habit of paying bills on time every month can pay off in the long run by improving your credit score.

Maintain Essential Insurance to Manage Risks
Just like wearing a helmet or putting on protective gear, part of any game plan should include how to protect yourself from risks. Health insurance, auto insurance, renters/homeowners insurance, life insurance to protect loved ones, and disability insurance are generally recommended for just about everyone. The amount of coverage, premiums and deductibles should be carefully considered to fit your situation and provide proper protection for the risks that apply to you. You may also want to consider an umbrella policy. There are additional types of coverage to consider if you are running a business.

Government Relief & Resources
Make sure you understand any government benefits, stimulus money or tax benefits for which you may qualify. In response to the pandemic, several governmental actions were implemented to help individuals and businesses, and to keep the economy operating. First the CARES Act was passed, and later the American Rescue Plan was created to provide resources including extended unemployment benefits, Economic Impact Payments, relief for student loan borrowers, and expanded access to relief payments for people with disabilities. For more information on the latter, see usa.gov’s “Financial Assistance and Support Services for People with Disabilities”. Find out if you may qualify for tax credits and deductions on irs.gov or talk to a Money Coach.

Have a great season and keep on going to the finish line!
From wherever you are today to where you are headed, your Money Coach is your teammate who will collaborate and work side by side with you to achieve your financial goals. It’s time to get off the sidelines and make it happen.

How Your Coach Can Help
Strategize with your coach about your finances and get individual solutions that fit your lifestyle. Create a financial action plan that meets your current circumstances.

• Simplify budgeting
• Build emergency savings
• Create a recovery plan
• Understand the factors that go into your credit score
• Feel confident about planning for retirement

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