Post Election Financial Survival Guide
Yay!! We survived another election season- well, sort of. As of this writing, we still aren’t sure who will be president. Our country has had contentious elections, pandemics, and world wars, and we’ve survived. We will survive our current season too. No matter what you think of our nation, we are a nation of survivors.
So the million-dollar question is, how do I financially survive election outcomes? My answer is the same: sticking to the core financial pillars that never change.
I will admit this year came with an extra bag of crazy (land hurricanes, firenado, insect infestations, I can go on), so unlike other elections seasons, I have to throw in a little extra:
Post-election (or, in this case, during and after the ballot count) Mindset
A lot of us feel mentally twisted, like the girl from The Exorcist. To help smooth out the “craziness bumps,” take some time and work on changing your mindset. The following are a few ideas of where to start:
God gave us two ears and one mouth for a reason- listen to understand rather than debate.
The only perfect person who walked the earth was Jesus. Both political parties have imperfect people.
“News Fast”: A favorite mantra of the media is “if it bleeds, it reads.” The media’s goal is to put you on the emotional roller coaster of breaking news so that you will watch.
Unfollow the crazies- the people in your life you secretly think are crazy. Do a people detox.
Check your mental narrative. If your narrative starts with, “it’s all going to hell because of “X,” then reframe; if no person is perfect, then no party is perfect. Both political parties have flawed policies and flawed people, all of who are equally loved by God.
If everyone you engage with at home, work, or the church looks like you see in the mirror, then I challenge you to listen to someone who looks nothing like you or shares your beliefs. It’s not that hard to say, “Hey, I know we (live, work, go to church together), but I would like to get to know you better. Choose an activity and commit to doing half the talking.
Rest- We can only stand so much. Take breaks, go for a walk, pet a dog, hold a baby (or watch one laugh on Youtube), etc.
Create an investment plan to protect you from your emotional self.
Feelings have no logic, and the last thing you want to do is make a decision you’ll regret. Create a strategy to help you make logical money decisions. If you are financially secure and wonder what to do with extra money, ask yourself the four questions below to help you decide.
What’s the purpose of the money? Articulate your goal for the money. Is it for emergencies, gifts, a new car, or a new home?
How many years before you need the money? Write down how long before you need the money. Next, break down the monthly number to see how much you may need to save monthly, quarterly, or annually to reach your goal. If you need help calculating, websites like Nerdwallet and Investor.gov can help.
How comfortable are you with the highs and lows of the market? The average drop in the market during a recession is about 30%. How comfortable are watching a $100k portfolio possibly go down to a $70K portfolio, even if you know it's temporary? If you’re unsure of your investment risk tolerance, use a risk tolerance questionnaire to help you decide.
How much time do you want to devote to investing? A mutual fund has a team of financial professionals to help monitor the investment. If you are purchasing stocks without an advisor, you are on your own to monitor your investments. “Two Investment Approaches for Busy Professionals” is an article I wrote for Forbes reviewing low-cost options to help people invest.
Focus on what you can control, 8 Pillars of Financial S.E.C.U.R.I.T.Y.:
The 8 Pillars of Financial S.E.C.U.R.I.T.Y are the eight essential components to becoming financially secure. If you notice, all of the items are things you can control. Even if it’s small, either now or in the future, you can take steps to become financially secure. The following are the 8 pillars:
S- Spending Plan: Create a spending plan that reflects all of your spending AND create a crisis spending plan. A crisis spending plan is the minimum expenses needed to survive if you have lost your income.
E-Emergency Fund- The goal is to save enough to cover at least three months of expenses. I know this number may sound huge, so start small. Even $25 saved a month is better than $0 saved per month.
C-Credit Card Zero- I know you have better things to spend money on than helping your credit card company increase their profits with the interest you’re paying them monthly. Get into the habit of paying off your credit card balance every month.
U- Unexpected expenses covered with insurance- Review your insurance to maximize your coverage.
R- Retirement account is on track-Bite the bullet, and do the retirement estimator on your 401k plan's website. If you aren’t on track to retire and can do it, consider increasing your contributions. At a minimum, contribute enough to get your full company match. A recession can be an opportunity to buy investments cheaply.
I-Incorporating God in your plan. By some scholars’ estimates, the Bible offers over 2,000 words of wisdom referencing money. Incorporating God in your plan can help you avoid a decision that takes you off track from living a life of passion and impact.
T- The debt you have is manageable- Ideally, you don’t want your total debts (including your home and car) to exceed 40% of your take-home income. If it does, use a debt payoff calculator to come up with a repayment strategy.
Y- You have an estate plan. An estate plan is your written wish for what you want to do with the things you own and the people you love if you cannot decide. Create an estate plan to make sure people honor your wishes.
I know this election, heck this year, has made the wine and ice cream industry boom due to stress drinking and eating. Take a breath, know it will be OK, and m
