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Saturday, May 15, 2021

A financial planner says her clients’ biggest worry is uncertainty

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  • The pandemic and ensuing market chaos has caused deep financial insecurity for many Americans.
  • One financial planner says even her clients who are still working are worried about suddenly losing income and what the future holds. 
  • Experts say the uncertainty isn’t an excuse to lose control of your financial situation — use this time to observe your spending, revisit goals, and leverage cash surpluses to build wealth.
  • Try commission-free trading with TD Ameritrade »

Americans are facing a once-in-a-generation crisis that has many people worried about the same thing: financial security.

“I think the biggest fear right now is not being able to pay the bills,” Lauryn Williams, a certified financial planner and the founder of Worth Winning, told Business Insider.

This isn’t a revelation considering more than 46 million people have filed jobless claims since the beginning of the COVID-19 pandemic, and around 20.5 million are currently collecting unemployment benefits. The payouts include an extra $600 a week that’s set to end on July 31, even though the unemployment rate was 13.3% as of May.

What is surprising, however, is that people who have been able to move past “survival mode” financially are concerned, too, Williams said. “Even those that are in a good position right now are worried this could change at a moment’s notice, because I saw my friend that didn’t do anything wrong at their job” but got furloughed or fired anyway, she said.

Although data shows many people have cut back spending during the pandemic and in turn boosted their savings, that doesn’t alleviate fear about what’s around the corner, Williams said. Some of her clients are hesitant to go all in on paying off debt or invest more despite having the means.

Many people who are being hit by layoffs or pay cuts are being penalized for something that is completely out of their control, Williams said. “That’s very, very scary for a lot of people. And I think the fear of losing your income or not being able to earn — it’s the No. 1 thing that people are facing,” she continued.

Look for opportunities to take control of your financial situation 

Despite the unpredictability of the coronavirus and the financial markets, Williams said there are ways to maintain control over your situation, especially if you’re still earning a paycheck.

“It’s really important how you think about these things right now. If you’re doom and gloom, you kind of attract that energy,” Williams said. “As you’re thinking strategy and optimization, even in the midst of uncertainty, you can make some really good moves right now that will kind of quell your anxiety and give you the ability to say, OK there are things that are out of my control, but with the things that are in my control, what can I do? What are the opportunities and what are the obstacles to me getting advantages or access to those opportunities.”

Williams said taking inventory of your money, cutting unnecessary costs, reevaluating your goals, and bulking up your savings are simple ways to take back control of your situation and prepare for whatever comes your way.

Malcolm Ethridge, a certified financial planner and executive vice president with CIC Wealth Management, wrote in an article for Business Insider that he’s advising his millennial, high-earning clients to position themselves to take advantage of the next market downturn by accelerating retirement contributions, participating in an Employee Stock Purchase Plan (ESPP) if it’s available to them, and maintaining good credit.

Gideon Drucker, a certified financial planner at Drucker Wealth who works with Henrys — short for “high earner, not rich yet” — told Business Insider’s Hillary Hoffower the one thing you shouldn’t do is wait until life returns to normal to make any decisions.

“The biggest hurdle is that the world is upside down, so you think, ‘I don’t know what will happen, I’m going to wait on everything,'” Drucker said. Instead, use this time as a catalyst for change — observe your spending, retrench if needed, and establish clear goals to use as a guide.

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