At Creekmur Wealth Advisors, we don't just tell our clients what to do. We believe strongly in the fundamental principles of financial planning. With that thought in mind we wanted share the top few items that we have been implementing in our personal lives over the last few months.
Cash Flow Management – This is a key principle to financial success. Essentially, we must spend less than our income to have funds available to save towards our goals. This principle is even more important during periods of decreased household income. Over the past few weeks my wife and I have sat down to do a deep dive into our current cash flow. We knew that there was a definite possibility that our income could be affected if my wife were to be furloughed. Our primary goal was to identify areas could decrease spending. For us, this meant cutting down on eating out, delivery orders, and any non-critical household expenses!
Preserving & Auditing Our Investment Plan – During periods of extreme market volatility we as advisors are constantly preaching that our clients stick to their investment plan. I revisited my asset allocation during the first few weeks of March to ensure that I was still comfortable with the level of risk that I had in my investment accounts. Next, I made a list of investments that I wanted to purchase in my accounts in the coming weeks. Finally, I prioritized getting cash into my investment accounts that was not needed for my Emergency Savings. For my family, this meant making our 2020 Roth IRA contributions so that we would have funds on hand to invest at our target prices as markets fell.
Identify Areas of Your Financial Life to Shore Up – Times of economic uncertainty often expose flaws or areas of weakness within a plan. During a past time of crisis one of our advisors felt the pinch of reduced cash flow and as a result has increased his emergency savings. This action has made the current crisis feel much less threatening.
What parts of your financial life feel uncomfortable right now? What specific steps can you take to move those items in a positive direction? Many of our clients are requesting that we review their life insurance coverage, investment risk tolerance, and income/tax plan for the years ahead.
Each person's situation and stage of life is unique. That is why we create custom financial plans for each of our clients - specifically tailored to achieve their personal financial goals. We design plans with maximum flexibility taking into account market fluctuations and changes in employment. If you have questions about your current plan or are unsure if you are still on track with your current plan, please do not hesitate to reach out. As always, we are here for you!