COVID-19, Economic Crash, a Bear Market – OH MY!
Let’s start by saying, we do not want to make light of the risk to life we are seeing from the Covid-19 virus – people are getting severely sick and some are dying. Our heart goes out to all those who have lost loved ones or are battling this terrible disease.
Can you find financial confidence among all this confusion? Our role as financial advisors is to guide our clients to financial stability and retirement security. None of us can control the virus, economy or the markets, but you can be confident and find a sense of contentment if you apply Biblical Principles relating to your finances.
What are some of these principles- Spend less than you earn, build reserves and liquidity, avoid the burden of debt and give generously. These biblical principles aren’t new and any person, regardless of their beliefs, can and will benefit from them (after all they’ve stood the test of time, some perhaps just didn’t realize they come from scripture and when we follow God’s principles we are as prepared as we can be).
So as you seek to apply these principles in the midst of our current reality, here’s a few practical items that you might be faced with …
If money is tight start by reducing your spending - reduce your tech expenses, cut back on cleaning or gardening services, and control food costs (no wine).
These recent market lows may seem like the time to drain your reserves and buy – don’t do it. Now is not the time to get greedy. Preserve your reserves for you just don’t know what may happen tomorrow.
Think long term and do everything you can to not take money from your retirement accounts. It took hard work to build them. If you take money out today it will be even tougher to get it back in the future.
Avoid debt. Do everything in your power to not borrow – debt is often like a rattle snake that comes back around to bite you in the end.
If you have a little extra give to those in need. With this lockdown there are many around the world who will go hungry, some will starve. Being generous is one way to fight our own fears.
One thing that is certain is economic uncertainty (while next time it likely won’t be a pandemic behind it, something else will come and this economic uncertainty is bound to happen again), but if we can make sound financial decisions, apply and follow biblical principles we will be as prepared as we can possibly be. As Ron Blue puts it “At any point in the history of a nation, there is economic uncertainty and reason for people to fear. Since economic uncertainty is certain, we should not be surprised by it” — Ron Blue, is widely considered to be the father of Christian Financial Planning. He is the founder or co-founder of Ronald Blue Trust, National Christian Foundation, Kingdom Advisors, and The Ron Blue Institute of Financial Planning.