The ultimate litmus test for your financial life plan.
Risk management is a critical factor in financial life planning. Throughout the planning process we ask a lot of “what-if” questions, but we do not recall a time over the last 30+ years that we’ve ever asked, “what if a pandemic hit?”. This is a good time to take stock and review how well your plan is stacking up against the challenges the pandemic is throwing your way. Then ask yourself, which one of the emoticons on the right best describes how your plan is performing.
How has the pandemic changed my spending?
On April 20, 2020, Statistics Canada published that “Nearly 3 in 10 Canadians report that Covid-19 affects their ability to meet financial obligations or essential needs”
- Do you have an emergency fund in place? Did you need to use it?
- Did you require a mortgage and/or credit card deferral arrangement?
- The Canadian Bankers Association (CBA) published that “As of May 13, 13 CBA member banks have provided help through mortgage deferrals or skip a payment to more than 740,000 Canadians, which represents about 15% of the number of mortgages in bank portfolios.”
- How much are you spending on groceries?
- Canada’s food price report expects food prices to rise 4% this year But, the impact of Covid-19 is far-reaching. Supply chains have been interrupted and we’re changing the way we think about food.
- Are you buying more local products?
- Have you increased your online spending?
- A Globe and Mail article on May 7, 2020 reported that Canadian Tire has had exponential growth in online sales. “The flagship site saw average order volumes increase to more than 80,000 a day in April, compared with an average of 5,000 a day before Covid-19.”
- Are you saving money? Have you discovered your “latté factor”?
How has my income been affected?
- Did you lose your job or have your hours decreased?
- Are you working from home? Will you continue working from home?
- Has your business been affected negatively or positively?
- Have you considered retraining for another career because of the pandemic?
Has the pandemic changed my retirement plans?
- Are you thinking you’ll need to extend your retirement date? Or, have you decided to move ahead sooner rather than later?
How does Covid-19 affect my property value?
The Canadian Real Estate Association released statistics on May 15, 2020 that found “national home sales and new listings fell by more than half in April 2020 compared to March.”
- Has the pandemic changed your view on where you want to live or what type of home you want to live in?
- Have you joined the masses in tackling Do It Yourself (DIY) projects around the house?
- Have you jumped on the ‘staycation’ bandwagon? Are you fervently planting flowers and sprucing up your yard to host social distanced barbecues and garden parties?
When will I be able to travel again? Even when it’s safe to do so, how badly do I want to travel again?
According to the government of Canada’s travel advisory “Avoid non-essential travel outside of Canada until further notice.”
- Do you have a robust bucket list of countries you wish to travel to?
- What would need to happen for you to resume your travel plans?
How has the pandemic affected my family?
- If you have children, how has having them at home changed your life?
- If you have elderly family or friends, how has isolation and lockdowns implemented at personal care homes affected you and your loved ones?
How is it affecting my physical and mental health?
Whether you started a robust new exercise program or put on a few pounds, you’re not alone. Mental health issues have been a prevalent topic for good reason. The government of Canada website dedicated an entire section to it.
- How are you feeling?
Have my priorities changed as a result of Covid-19?
Covid-19 has turned many lives upside down. A shakeup like this might have you pausing to reflect on what’s most important. Visit the values worksheet to revisit your priorities.
Now is the time to update your life plan to reflect what you’ve learned during the pandemic about yourself and your priorities. In the words of Winston Churchill “Don’t let a good crisis go to waste.”
The information in this commentary is for informational purposes only and not meant to be personalized financial planning advice. The content has been prepared by the team at Fraser & Partners from sources believed to be accurate.