Your Post-Pandemic Financial Checklist

The COVID-19 pandemic isn’t over yet, but with vaccines rolling out across the country, the end may be in sight. While it’s not time to be lax about public health measures such as social distancing and mask wearing, now is a good time to start thinking ahead financially.

Here are seven items to put on your to-do list to prepare for life post-pandemic:

  • Review your current financial situation.
  • Consolidate debt and refinance your mortgage.
  • Build emergency savings.
  • Rebalance your portfolio.
  • Estimate future expenses.
  • Convert retirement funds to Roth accounts.
  • Make changes to your estate plan.

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Review Your Current Financial Situation

For most people, the pandemic affected their finances in some way, either because they lost income or saved money by staying home. Families may also have adopted costly new habits, such as online shopping, expensive hobbies or getting takeout dinners more frequently.

“When things are unsettled, it’s easy to slip into an anything-goes mentality,” says Marco Sarkovich, associate attorney with Slate Law Group in San Diego.

Now is the time to step back and take stock of how your financial situation has changed over the past year. Consider things such as whether you are spending more, changes to your income and the balance in your savings and retirement accounts. Use this information to then rework your budget as needed.

Consolidate Debt and Refinance Your Mortgage

If you have debt, take advantage of the current low-interest rate environment to save money. For example, you may be able to take out a personal loan to pay off high-interest debts or move balances to a credit card with a low introductory rate.

“In my opinion, there has never been a better time to consolidate debt,” says Greg Hammer, president of Hammer Financial Group in Schererville, Indiana. “They are practically giving money to people when it comes to refinancing.”

Thanks to rising property values, you may be eligible to refinance for more than your current mortgage balance and use the extra cash to pay off high-interest credit cards or loans. Even if you don’t need to consolidate debt, refinancing a mortgage could result is considerable savings.

Build Emergency Savings

The pandemic was especially difficult for those with no emergency savings. “The majority of Americans were not prepared to go months on end without income,” Sarkovich says.

Make building – or rebuilding – your emergency fund a priority as the pandemic winds down. If your budget barely covers basic expenses, look for other sources of money that could be used for savings, such as stimulus money or a tax refund.

Later this year, parents are also expected to receive advances on next year’s child tax credit. That can be another source of money to set aside for a rainy day.[ 

Rebalance Your Portfolio

The markets took a wild ride in 2020, with stock prices dropping dramatically and then making an almost vertical rebound.

“Even the best of plans, of course, didn’t include a global pandemic,” says Brian O’Leary, wealth advisor and senior analyst with Aline Wealth, a wealth management firm with offices in New York and Florida. As we return to a sense of normalcy, rebalance your portfolio to ensure it has the proper mix of stocks, bonds and other securities based on your goals.

This is also a good time to review how you reacted to last year’s market fluctuations. “If you jumped out (of the market), that is a sign your risk tolerance was off,” according to O’Leary. Work with a financial professional to ensure your portfolio reflects your comfort level when it comes to market volatility.

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