Business
I had the pleasure of speaking to Maria Erickson, founder of Freedom Financial & Business Planning, LLC. Maria transitioned into Financial Planning after working as a consultant in the financial planning industry for 20 years. The main areas that we covered during the course of the interview were what to do with your money right now, what to do if you are thinking about moving, and who to talk to about the current financial state of things. Now what should you do with your money right now? Maria identified that one of the most important things that you can do right now is to build an emergency fund. Try to save three to six months worth of expenses to be able to give you enough money to secure your future if something should happen. If you have a three to six month emergency fund then you will be able to have a great deal of peace of mind because if something should happen you should be fine. The rule of thumb for an emergency fund is if you are an entreprener or have a “risky” job then move towards the six month savings fund. If you have a “safe” secure job then like the government you can go with three months of savings. Personally I prefer a more conservative approach and go with the six month emergency fund because things happen and it gives me a greater peace of mind. Once you get past the point where you have an emergency fund you should start to consider investing your extra funds. Right now there are opportunities available because things become cheaper during an economic down turn. It isn’t a good time to sell your investments because you are watching them go down and down in value. It is easy to follow herd logic and feel pressured to sell your investments because some people you know will be doing this. Selling this at this time could cause you to have to work extra years to make up for this poor decision. Instead you might be better off burying your head in the sand and ignoring the financial news for the next 12 to 24 months. Sometimes it’s better to turn off the news channel and not be influenced by the negative news and feel pressured to sell. Now what should you do if you are thinking about moving? You should line up a job before you move or have some type of income prior to moving. Moving to an area suffering from an economic recession can be very hard. Many employers might not be maintaining employment because their revenues are down. Some people will be kissing there jobs goodbye because of this recession. If you have a home to sell prior to moving it may be more difficult to sell it because of the Corona Virus. Having people come to your house and look at it might be more difficult because of social distancing and other things. Now who should you talk to about the current financial state of things? You may be experiencing your first economic down turn while you are investing. You should reach out to someone that you trust and feel is knowledgeable about investing. It could be an older uncle or relative that has experienced some of these things. If you don’t have a strong background in personal finance then you might want to contact a fee only financial planner. They will be able to provide you with some assistance in dealing with the emotional turmoil that a recession may cause. Regardless of whatever else you take away if you have someone that you can talk to about the things that you are going on in your life then you will feel calmer about the decisions that you are making. If you want to find out more about freelancing and copywriting then you can reach out to Maria Erickson, CFP here.