The Steadying Benefits of a Financial Plan in Uncertain Times

You know that saving and investing can help secure a better financial future for you and your family. But in times of economic uncertainty, it’s easy to fear that your existing financial strategy won’t see you through.

COVID-19 has taught us that factors out of our control can always affect our finances, whether due to an unstable job market, unforeseen expenses, or a volatile stock market. Financial security becomes a delicate balancing act—like walking a tightrope amidst a gust of wind—and some people would prefer to jump to safety rather than forge ahead.

With a financial plan in place, you have your destination in mind. And 83% of people who build a financial plan feel better about their money in just one year. Learn more about how to find your center of gravity (and perhaps begin to inch forward) in our guide to financial planning in uncertain times.

Find your footing amidst economic uncertainty

Too often, people who are saving and investing towards the future begin to panic when the present creates strife. They might react by…

       Rearranging finances between investing and savings accounts.

       Selling large quantities of underperforming stocks.

       Losing sight of long-term plans.

If you’re tempted to take action in any of these ways, we’re here to tell you to step back and reassess.

There may be periods when it is necessary to do any of the above. But a lot of the time, staying on course is a better path. Warren Buffet has said, “The stock market is a device for transferring money from the impatient to the patient.” If you’re reacting by selling low, you solidify your loss position—but in recent history, the market has always rebounded.

It’s important to have a plan in place so you don’t continuously change course in trying times. A financial plan documents your current financial situation, what you want to achieve, and the steps you will take to get there—and it can be particularly useful in times like these.

 

Look to the future to keep you on track

People often veer off-course during times of financial uncertainty because they do not have a clear picture of what their ideal future looks like. In general, everyone plans to keep their finances growing. You may know you want to “live comfortably,” although you have not yet defined what that means. Couples may agree they want to retire by a certain age, but have a different mental picture of what that means.

The financial planning process gives you a reason to sit down and document what you want for the future. This may include:

       Purchasing a vacation home

       Investing in your children’s education

       Retiring early

Only once you have established where you want to be will you know how much to invest and save each month.

When the economy is not living up to expectations, a financial plan lets you assess how far along you are in reaching your goals. This can provide you with reassurance and guidance on next steps as you navigate a temporary setback.

Be proactive rather than reactive

If you find yourself wanting to change course when the market is bearish, you’re likely looking for a sense of control. But this is a reactive decision that may have consequences for your future plans.

There is a way to regain control. Taking stock of your current assets in light of your future plans can help you to gain confidence and provide you with actionable steps for the present and future. A proactive financial plan prevents you from being swayed by stock market fluctuations. You can build an emergency fund to help you find your bearings. As a bonus, you’ll be better prepared for future uncertainty as well (especially when you work with a wealth advisor to outline contingency steps).

Starting your financial plan

92% of people in the U.S. say that feeling like their finances are in order gives them confidence and high levels of satisfaction.

If you’re reading this during a period of uncertainty, don’t panic. Regain a sense of balance today by documenting your ideal future, your current assets, and the steps it will take to get you towards a stable future.

Keep your destination in sight by downloading our complimentary financial planning calendar. And contact Marshall Financial Group when you’re ready to develop a detailed plan with our wealth advisors.

 

Investment advisory services offered through the Marshall Financial Group, Inc, an SEC registered investment adviser, with its principal place of business in Doylestown, Pennsylvania. For more information visit our website (www.marshallfinancial.com) or the SEC’s
website (www.adviserinfo.sec.gov). This blog post is provided for informational purposes only and should not be considered personalized investment or a solicitation to transact securities business. This post uses information derived from and links to third party sources, while we believe these sources to be accurate, we make no representations as to the accuracy of any information prepared by any unaffiliated third party. Information presented herein is subject to change without notice. Our financial calendar is offered for informational purposes only and should not be construed as a tool to assist in determining what securities should be bought or sold or when to buy or sell them.

Disclosure: Marshall Financial Group, Inc (“Marshall Financial”) is an SEC-registered investment adviser with its principal place of business in Doylestown, Pennsylvania.   This newsletter is limited to the dissemination of general information pertaining to Marshall Financial Group’s investment advisory services.  Investing involves risk, including risk of loss.

This newsletter contains certain forward‐looking statements (which may be signaled by words such as “believe,” “expect” or “anticipate”) which indicate future possibilities. Due to known and unknown risks, other uncertainties and factors, actual results may differ materially from the expectations portrayed in such forward‐looking statements. As such, there is no guarantee that the views and opinions expressed in this letter will come to pass.

For additional information about Marshall Financial, please request our disclosure brochure as set forth on Form ADV using the contact information set forth herein, or refer to the Investment Adviser Public Disclosure web site (www.adviserinfo.sec.gov).  Please read the disclosure statement carefully.