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Managing Finances in Uncertain Times

The coronavirus pandemic has impacted every aspect of our lives, including our financial planning. What seemed secure in January 2020 appeared shaky at best just weeks later, leading some people to divide this period into AC and BC: before COVID-19 and after COVID-19.

While our concerns will depend mainly on our individual situation — our age, job security, financial situation, and family obligations to name a few — here are some common areas to consider when we’re forced to manage finances in uncertain times. 

Check in on Your Monthly Budget


Before you can judge the effect on your monthly budget, you’ll need a monthly budget. If you have one, great. If not, this is the perfect time to create one. 

If you have a budget: 

  • Evaluate your spending habits. Even if your personal situation is secure — job, health, savings, and long-term planning — things outside your control are volatile. Now’s the time to cancel that monthly subscription service you never use or the landline phone you don’t need. Eliminate any credit card debt to free up money in the future. 
  • Assess your emergency fund. Experts say that, ideally, we should have anywhere from three to nine months stored away in an easy-to-access emergency fund — money in a savings account that you could live on if your income suddenly stopped. If you have an emergency fund, check on the balance. If not, take the money you saved from your monthly budget-cutting and start one.

If you don’t have a budget: 

  • Start one. Keep it simple but comprehensive. Include all of your expenses and income. Monthly credit card statements come in handy here. 
  • Evaluate your spending habits. See above. If you’re new to the budgeting world, you’ll likely be surprised at some of what you’re spending. 
  • Start an emergency fund. If you didn’t have a budget, it’s unlikely you had an emergency fund. That’s okay — start one now. If you can set aside $25 a week, you’ll have more than $1,300 in the fund by this time next year. 

If your job is secure and you have adequate health insurance for you and your family, you won’t have to adjust your habits radically. 

But remember: leaking roofs and faulty transmissions have their own timelines. If you’re faced with an unexpected major expense, you may need to use your credit card as a fallback option. 

The Impact on Your Investment Strategy 


One of the biggest shocks from occurrences like the coronavirus is the instability they cause in the markets. Markets don’t like uncertainty, and large-scale buying and selling is more the result of panic than strategy. 

The best advice? Do nothing at the outset. 

That doesn’t mean that you shouldn’t reassess your investment strategy periodically. If you’re retired or near retirement age, you’re counting on your savings. Hopefully, your investments have shifted to a lower risk balance over time, which will enable you to weather the current storm. 

And while you may be tempted to sell stocks as prices drop, remember that the market has always bounced back (see below). Also, remember the tried-and-true adage: buy low and sell high. If you need immediate cash, it’s better to draw from bonds and give your stocks a chance to rebound. 

If you’re a ways from retirement, stick with your plan. And stop looking at your portfolio every day. 

Remember That We’ve Been Here Before


In the middle of a global crisis, it’s easy to think that we’re in uncharted territory. No doubt there are unique aspects to what’s happening, but we’ve faced the unknown before. And we not only survived, we came back stronger. 

Beginning with HIV/AIDS in 1981, there have been 12 epidemics that have impacted the markets, including SARS, H1N1, and Ebola. The impact of these outbreaks on market drawdowns averaged less than 2 months, with the exception of AIDS (5.1 months). 

Although epidemics can spur market corrections, their impacts are finite. That said, it’s difficult, if not impossible, to predict exactly how long it will take the market to recover when we’re still dealing with a pandemic. That’s why a steady, calm, and patient financial course is best. 

How to Move Forward 


It’s difficult to be a rational, calm investor in turbulent times. The best way to become one is to have a strong plan in place before the next roller-coaster ride comes along and stick with it. 

Because the ups-and-downs and complexities of investing can be overwhelming even in the best of times, consider working with a financial advisor who is trained in retirement income planning or wealth management planning, which means they will have the expertise to help you weather the storm with confidence. In the end, that may be your surest route to a smoother ride. 


This content and information was created by a third party and not The College. The College assumes no legal liability for the accuracy, completeness, or usefulness of any such content and information and the views expressed therein do not necessarily represent the views of The College.

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