During times of economic crisis and uncertainty, the significance of prioritizing financial stability suddenly leads every conversation with family and friends.
For agencies, like BALANCE, that provide services to underserved and financially vulnerable communities every day, we know the importance of financial health and coach people towards improving their financial wellness. Of course we have been doing this long before COVID19 but given recent circumstances and pressing concerns, our primary focus has shifted to providing support services to those that have been devastated by the crisis. We have clients that are fighting to survive unemployment or a reduction to their salary without an emergency savings. I am tormented by thoughts of “I wish we could have reached them months before” and “what more could we have done to assist them in being better prepared?”
In the months ahead, after our lives “normalize” and we get back into the groove of our everyday agenda, what can we do to ensure financial well-being continues to remain a topic at every table? Our goal is to improve the financial health of clients so that they are better able to weather the next financial storm.
Where do we start? We begin with ourselves, of course! Lead by example and by sharing your knowledge on the importance of financial basics, such as, the Five Steps to Financial Triage.
Five Steps to Financial Triage
- Your own financial health matters. Financial stability is a key contributing factor to overall well-being so give yourself permission to seek professional help, such as a certified financial coach, to help you develop a personalized financial action plan that is right for you. Sometimes, if you are too close to a problem, solutions can be hard to see. A professional prospective can make a big difference.
- Assess your situation. What are your primary concerns? Are there challenges that you need help with undertaking? Look at the areas of saving, spending, borrowing, and planning. Do you need to develop a 3-6 month emergency fund? Reduce spending during crisis and recovery? Look at current interest rates to see about a reduction via consolidation or special COVID19 programs. How can your family plan for the next financial challenge? Focus your attention on the most pressing concern.
- Take inventory. You will need to have an accurate understanding of where you currently stand in order to develop a plan. The budget process, which is a complete review of income, assets, expenses and debts will make this clear.
- Prioritize your needs and goals. Your immediate needs such as food expenses and rental or mortgage payments should be at the top of the list, and non-essentials towards the bottom.
- The key to success is to create an action plan. Several small actionable steps should collectively lead towards accomplishing a goal. It is important to hold yourself accountable by tracking your progress and adjust your plan, as needed.
Don’t take your eye off the ball once this crisis is over…. Another one will be along soon enough, so let’s use this time to keep the focus on increased financial health!