Financial preparation in a post-COVID world

With the onset of the COVID-19 pandemic, 2020 was a lesson in the importance of preparing as much as possible for financial surprises. Now that we’re well into 2021, it’s clear we should keep that lesson in mind. Jay Spector, of Barton-Spector Wealth Strategies, talks about being prepared for a financial crisis and upcoming tax changes.

Emergency Funds

The coronavirus pandemic took many by surprise, including experts. “I think people need to plan for this type of unknown and you can do that by making sure you have an emergency fund,” Spector said. This should be a cash fund that can cover six to nine months. It’s also important to use a budget so you know what your expenses are and plan for them.

Diversified Income Sources

Spector also suggests diversifying your investments and having other sources of income, such as a part-time job. This is especially important when planning for retirement. “Making sure you have a diversified investment mix, but also a diversified income source; not relying solely on one thing that you can survive and thrive through an economic downturn as we’ve experienced,” Spector said.

Estate Planning

Spector worked a lot with people last year to ensure their estates were in order. This includes making sure all legal documents are in place like wills, trusts and power of attorneys. “Last year was quite unexpected.  So, you want to make sure to be on the front end of it and not try to catch up and figure it out on the back end,” Spector said.

Life Insurance

In the event of something catastrophic, Spector recommends looking into life insurance. Due to the pandemic, many are trying to secure life insurance. Spector points out the unknown behind the relationship between life insurance and COVID-19. “What we don’t know is how insurance companies are going to react to the people who have COVID and what that’s going to do to their premiums or their ability to acquire life insurance in the long term,” Spector said.