Long term financial goals will undoubtedly be affected by the health crisis but at what cost?
The health crisis has forced people to change the way they think and plan for their future. That being said, you need to revisit your targets and goals. This is true especially for the long term plan you have in life. The pandemic should not stop you from trying to reach your goals but you need to be able to make the necessary adjustments.
Your present actions, as well as your short term goals, are predominantly dictated by your long-term targets. This makes it all the more important to make sure that you are still on track with your goals but at a new pace. The health crisis could have affected your finances so much so that you have to move things around your budget to make ends meet.
Your long term financial goals need to be able to adjust to these circumstances. If you continue with your previous plan without regard to your present financial situation, you can burn out easily. You might slowly find your finances being depleted and you start to miss your targets. This happens when your budget is beings stretched beyond its limits.
This is one of the biggest reasons why you need to understand your long term goals well and how the pandemic affects them. You might think that you have to put every single target you have on hold until the health crisis is resolved. But you might be surprised that the pandemic has a different effect on your goals than you originally thought.
Buying a house at the top of your long term financial goals
One of the long term financial goals Americans have has a lot to do with owning a house. This means either paying off of an existing mortgage loan or finally being able to save for the downpayment on the house you want. When the virus started spreading, it is easy to think that people would be quick to hold on to their cash and hold off any big-ticket purchases.
That thinking could hold true but Forbes shares a different view from people. There are millennials who are looking to buy a house in light of the pandemic. This is to help them get away from cramped living spaces that do not offer room for social distancing. There are some with growing families as well who needs a bigger space for their family.
For some, they would tend to hold on to their cash and make sure they are able to meet all their basic needs before buying a new house. This can be a budget for food, power and water at home, and even minimum house payments. What you decide on will be based on what your current financial situation is at the moment.
Retirement is another hot topic at the moment especially when the health crisis hit the country. A lot of Americans are torn whether they should retire this year or hold off on their plans. For those who are retiring in the next few years, you start to look into your nest egg. You try to understand if you are still on track or wildly thrown off-course because of the health crisis.
The fear of what the future holds is real that about 26% of Americans choose to cut back on their retirement savings as reported by TransUnion. Again, if your income is impacted, you need to make adjustments on your long term financial goals which could include saving up for retirement. It does not mean that you have to put a stop to it but cutting back and putting more on some other funds might be a necessity.
Your emergency fund could be one of your top priorities at the moment. This could be one of the reasons why you would be cutting back. The health crisis could also force you to consider working for a few more years after your target retirement date. This is to help you recoup whatever losses you incurred in your investments.
Starting a business
One of your long term financial goals could be to put up your own business. This is to help you get out of your 9-5 job and be your own boss. You might have a hobby that you want to scale up into a full-blown business venture. You could also have friends on board who want to start being financially independent and starting a business seems like the best option for it. But the current health situation could prove to be difficult for your business plans.
The pandemic could make you double back on your plans and force you into the planning board again. A lot has changed as a result of society’s response to the health crisis. Consumer behavior to market availability and even your numbers would be a lot different from what it was when you first started planning.
But before you lose all hope, CNBC made sure to point out, there are plenty of successful businesses that started around economic crises. Some of these companies are HP, GM, and even IBM which were put up after the Great Depression. Uber and even Groupon were established a little bit after the Great Recession. This simply means that you should not be too quick to give up on your business ideas. Yes, you might need to revise your approach. Yes, it entails a lot of hard work. But nothing great in life ever came easy.
It might not specifically fall into the category of your long term financial goals but getting married does entail a huge cost nowadays. From the dress to the venue, food, and even honeymoon – all these will cost you a lot of money. This is also one of the reasons why you need to talk about your finances before getting married.
Summer weddings should be happening left and right this instance if not for the health crisis. Now, weddings are either being postponed or outright canceled. More than the fear of mass gatherings, the cost that comes with it a major concern. It seems to take away a lot from your essential needs which are highlighted even more by the pandemic.
But there could be a middle ground in these – downsize your wedding. Since you cannot really host events with plenty of attendees, strip down your guest list even more. The pandemic could be a great way to let people know you cannot invite them without them feeling bad about it. Look for ways to downsize if you really want to proceed with your wedding plans.
Going to college
One of your goals could also be finishing college or even taking up post-graduate studies. And much like every goal you have, you need to re-think this target. The pandemic has forced a lot of colleges to take on an online approach to most of their curriculums. US News even shares that virtual tours are more emphasized for most colleges in the country due to the pandemic. Schools are even extending admission dates to accommodate students during this difficult time.
Education is important but there are ways to help you save money. For the time being, consider attending community colleges to help lower down the cost of attendance.you might also want to explore all your options for a scholarship. Check as well the costs since most schools will be geared towards online classes.
The pandemic will have an impact on your long term financial goals and you need to make sure you are able to make the necessary adjustments. The health crisis should not force you to put everything on hold. You can slow down and plan how you will achieve your goals despite the pandemic.