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By Barbara O’Neill, Ph.D., CFP®, AFC® [email protected].

Americans have lived with the financial effects of COVID-19 for more than six months. Many have experienced a loss or reduction of income, and related impacts such as food insecurity, depletion of savings, and outstanding payments for rent, utilities, loans, and other household expenses.

Conversely, there are also those who have experienced little or no negative financial effects related to the pandemic. Some military families with a service member’s paycheck and a spouse who has not lost income may fall into this category.

Family with 2 children walking through a parking lot.

Photo by Gustavo Fring from Pexels

Rightly so, media reports have focused on families experiencing financial distress with information about resources such as food pantries and unemployment benefits. This post takes a different path, however, with financial tips for the “financially unscathed.”

Here are 10 strategies for Personal Financial Managers (PFMs) to share with clients who are currently navigating COVID-19 without experiencing any major financial effects.

  1. Beef Up Your Emergency Fund
    Save more, if possible because economic conditions (both personal and global) can change. Experts now recommend larger emergency funds equaling six to nine months’ expenses (or more), given the extent of COVID-19 related job losses. Save as much as you can when you can.
  2. Invest in Your Human Capital
    “Upskill” yourself to prepare for a new position in an uncertain economy. Strategies include online courses and certification programs (e.g., the AFCPE Military Spouse Fellowship program). Focus on filling gaps in your skillset and making yourself marketable to future employers.
  3. Consider Refinancing Your Mortgage
    Consider replacing your current mortgage with a lower interest loan if the math makes sense (i.e., the interest rate savings for a projected loan term exceeds the closing costs). Mortgage interest rates are currently at historic lows, which makes homeownership attractive.
  4. Make Prudent Home Improvements
    Consider making home improvements that simultaneously increase the comfort of a home and provide a high return on investment (ROI) if a Permanent Change of Station (PCS) move becomes necessary. Examples include bathroom and kitchen remodeling, landscaping, and the addition of a deck or patio.
  5. Get Estate Plans in Order
    Encourage service members to review their existing estate plans and revise them, if necessary. Witnessing the deaths of more than 185,000 Americans due to COVID-19 is a powerful reminder for everyone to have key legal documents, like a will, living will, and durable power of attorney, in place.
  1. Assess Investment Risk Tolerance
    Discuss the possibility that the stock market could be volatile for some time due to uncertainty about a COVID-19 vaccine, the 2020 election results, and other factors. Encourage clients to take the University of Missouri Investment Risk Tolerance Assessment and discuss their results.
  2. Rebalance Your Investment Portfolio
    Encourage clients to develop “triggers” to rebalance investments, such as a retirement account balance, to their original asset class weightings (e.g., 50% C Fund, 30% I Fund, 20% G Fund). Some people do this on a set day each year and others rebalance when weights shift by a certain percentage.
  1. Increase Retirement Savings
    Consider upping thrift savings plan (TSP) contributions if impacts of COVID-19 has resulted in increased income and/or reduced expenses, such as commuting and eating out. Increasing savings by just 1% more of pay can result in tens of thousands of dollars of extra savings over several decades.
  2. Be Philanthropic
    Make sure clients understand the financial benefits of contributions to qualified 501(c)(3) organizations that help others. For the 2020 tax year, as a result of the CARES Act, taxpayers can take an “above the line deduction” and write off up to $300 of cash donations without having to itemize.
  3. Become a “Personal Finance Student”
    Encourage clients to learn at least one new thing every day about personal finance. Increased knowledge can foster preparedness and build resilience. Provide content for them to learn via websites, social media, text messaging, e-mail, and other information delivery methods.

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