You might recall when you didn’t have to remind yourself to be optimistic about a COVID-19 pandemic economic recovery this fall. Maybe you went to a few family gatherings at the end of the summer and were looking forward to many more because infection rates had slowed, businesses were re-opening and some of us were increasing the size of our bubbles. It felt like the worst was behind us.

While we’re all staying positive, today it seems we are facing more uncertainty. Many of us are working from home for the foreseeable future while others may be returning to workplaces that feel very different. The economy seems fragile and our masks are as familiar to us as keys, phone and wallet. It’s beginning to dawn on us that life will continue to go on but our pandemic lifestyle will be here for much longer than we bargained for, and we better get used to it.

Welcome to the New Normal.

One area you hope not to worry about is your finances. While the environment has changed significantly from a year ago, a good financial plan should be something you can lean on if these times seem gloomy.

“I think people have to pause and take a deep breath,” says Heather Richardson, Assistant Vice President, Sales Strategy and Effectiveness, TD Wealth. “People may feel there’s a lot of ambiguity about the future and that sentiment may spill over to their finances.”

Richardson hopes people can evaluate their financial plans from a well-rounded perspective and not from the standpoint of just one day. “As you see market volatility, it can lead to a spike in emotions,” she says. “Those emotions can lead to behaviour that may be inconsistent with the long-term approach that’s been built into a holistic financial plan,” she says.

Richardson says one of the benefits of a strong financial plan is that it may be able to bring you confidence in the face of volatility. Here are four things you can do that can help make your financial plan a success, keep it thriving and, hopefully, make the New Normal a little easier to manage.

Avoid short-term reactions

We’ve managed to get through turbulent markets earlier this year and it looks like there could be more volatility ahead. But Richardson points out that knee-jerk reactions can actually cause long-term harm to your financial plans. Taking money out of investments and putting it into cash, delaying major purchases and feeling paralyzed over economic decisions can be natural reactions, but Richardson says such moves are often driven more by fear than strategy and they may not have to occur at all when you have confidence in your financial plan. In fact, she notes that if you had pulled money out of the market when it declined in March, you would have suffered a loss and, not only that, you may have missed the recovery that followed.

Source: Bloomberg Finance L.P. as of Sept. 30, 2020. Bloomberg and Bloomberg.com are trademarks and service marks of Bloomberg Finance L.P., a Delaware limited partnership, or its subsidiaries. All rights reserved.

Get clear on your long-term goals

Richardson worries that many of us may be socking money away without knowing exactly what we’re saving for. Sure, we’d like to retire someday but we may not have worked out what kinds of things we’d like to do then, as well as how much those things may cost and when exactly we might be able to afford them. What comes off your paycheck and goes into an RRSP or your pension today will have a direct impact on your lifestyle in retirement, says Richardson, and a financial plan can help determine if you are saving enough, if the rate of return on your investments will be enough to get you there and help you plan for other goals you’d like to achieve along the way. “You should have a long-term goal for retirement but also account for your short-term goals, like buying a cottage or going on vacation, and ensure they’re baked in too,” she says.

Have a plan that’s personalized

Your money concerns may shift depending on which stage of life you are at. When you are just starting out, you may be more worried about dealing with student loans and immediate bills than a retirement plan 40 years in the future. On the other end of your life journey, you may be more interested in how your wealth will pass down efficiently to your heirs and your favourite charities. And then there are all the life events in between: saving for your child’s education, paying off your mortgage, deciding when to contribute to your TFSA or your RRSP, or wondering what kind of insurance you might need. Richardson says all these concerns (and more) mean each financial plan has to be tailored to a person’s life situation and personality, and evolve as their life changes.

Consider a checkup with your planner or advisor

In these unprecedented times, we have more than enough to worry about. Many of us may be concerned about suddenly losing income, not being able to pay an unexpected tax bill or dealing with other financial setbacks. Richardson says that a strong financial plan should not only cover your needs for today and your goals for tomorrow, but help us feel prepared in case the unforeseeable happens. Having an emergency fund, powers of attorney, estate planning or insurance in place can give you confidence to help face any eventuality.

While there are no quick answers, talking to your planner or advisor and having a financial checkup is one way to gain some reassurance and confidence. Your planner may be able to help alleviate unnecessary worries and ensure your financial plan addresses the issues that are on your mind. Moreover, a planner may be able to help you build a personal continuity plan that ensures your financial health if an unexpected emergency happens. Your situation could be in great shape but it always helps to be taken through your plan and be shown just why it’s working, Richardson says. Like a fire extinguisher in the kitchen, you’ll probably never use it, but you want the assurance that it’s in perfect working order.

“In times like these it can be easy to get distracted by headlines in the news or one day in the market,” she says, “But by looking at your long-term picture and the plan that’s put in place by a wealth professional, it can help ground you back to the decisions you made on the path to achieve long-term success.”

DON SUTTON

MONEYTALK LIFE

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DANESH MOHIUDDIN