Becoming Financially Prepared in an Uncertain World

Ben Rovee | Founder and CEO at Strategic Financial Designs, LLC


The world has changed dramatically over the last 6 months, both from a medical and economic standpoint. Nobody could have foreseen this global pandemic nor have comprehended the devastating impacts that were about to unfold. Although quarantine has given all of us plenty of time to spend with family, complete unfinished projects around the house, helping others in need, we also began to reflect on the past. Asking ourselves, could I have been more financially prepared? So, how can you become financially prepared in these extraordinary times? Everyone owes themselves the opportunity to have financial peace of mind. Now is the time to figure out what you can do to be better positioned financially, now and in the future. Consider following some basic foundational principles that focus on building essential groundwork and a strong ‘defense’ for your financial life. A well-positioned defense is the key to creating a sound financial life.

Here are a few basic fundamental rules that will help you create a Defensive Financial Foundation.

Rule #1: Create Efficient Full Replacement Protection for Peace of Mind

  • Complete a full insurance and benefits review.

  • Having Perfect Protection is critical in guarding against unforeseen risks and events.

  • Review, update or complete your important legal documents.

  • Review your life insurance coverages.

  • Seek out more efficiencies in premiums being paid for coverages.

  • Use a Financial Professional to help with this evaluation and analysis.

Rule #2: Save at Least 15% of Your Gross Income

This creates the potential to overcome various wealth eroding factors in the future such as:

  • Taxes

  • Inflation and Cost of Living

  • Market Fluctuations

  • Planned Obsolescence

  • Technological Change

Rule #3: Build Liquidity

Accumulate at least 6 months of your income into liquid and non-risk-based positions.

  • Liquidity can be a powerful tool when presented with unforeseen events, emergencies, and opportunities.

  • Positions you to have the ability to operate on a cash basis.

Rule #4: Take Control of Cash Flows

Complete a cash flow analysis to get an “accounting” of all inflows and outflows.

  • Understanding the circulation and flow of your money is vital in taking steps to optimize your financial health.

  • If you receive a tax refund, consider adjusting your W-4 to potentially create more take home pay.

What else can you do to improve your financial position?

  • Consider temporarily suspending contributions to retirement plans.

  • Consider allowable distributions from existing IRA’s or retirement plans as allowed by the recently implemented CARES Act.

  • Seek out the assistance of a Financial Professional to help you in assessing what is most appropriate for your own unique financial life.

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