Spring Cleaning … Where Do I Start?

How is it that when you have the most unstructured time on your hands, you get the least done?

Now, if you’re a doctor or nurse tending to Coronavirus patients, a banker pushing out PPP loans or a grocer working overtime to restock the toilet paper shelves, this doesn’t apply to you.

But waaaay more of us than normal are home full-time, working part-time for full time pay (come on, you know who you are) and fondly remembering this concept called “work-life balance.” Or you may be temporarily out of work, waiting for the next opportunity. 

Either way, the one thing you’ve got in common is more unstructured time than normal.

Do you have anything to show for it?

This Coronavirus pandemic has caused historic amounts of financial damage. Why don’t you take this extra time to get ready for your personal post-pandemic cleanup? What do you say we get ready to do some spring cleaning?

But where to start?

Protection. If starting with protection doesn’t make sense now, it never will. This pandemic came completely out of the blue and there lots more calamities than we can imagine capable doing similar damage. We need the protection of legal ownership arrangements (corporations, LLCs) and insurance to reduce the risk of any single calamity causing us to cash in our chips. Work with a seasoned professional that can audit your situation and make recommendations that fit you.

Savings. When the crisis is regional or national, governments and charities swoop in with piles of money. Good for them. But what happens when you experience a once-in-a-lifetime calamity of a purely personal nature? You lose your job. You get really, really sick. For these reasons and a thousand others you cannot now imagine, you need savings. More savings than you might normally think necessary. My recommendation is an amount equal to six months of your income. Yes, it might take you several years to get there. That’s all the more reason to get started now. 

Debt control. If you aren’t saving at least 10% of your income, you’re probably in debt. And your debt payments are likely well over the 10% of income threshold. Get a plan for getting out of debt and staying out of debt.

Invest. Investing is sexy. Prominent investors get interviewed and appear on television. It’s what the cool kids do. My advice about investing is simple: don’t invest too soon and don’t invest too little. 

Investing too soon means you short-circuited the protection, savings and debt control aspects of your plan. Investing too little means that when it came time to invest, you didn’t invest enough – you spent too much. 

Retirement. Retirement planning is like building a house for some day in your future. If you take short-cuts with respect to the foundation, you won’t really experience the problems until you move in. A sound, worry-free retirement requires the financial diversification of investment portfolios and the actuarial diversification of insurance policies. The two in proper proportion form the foundation of a sound, worry free retirement. 

Legacy planning. There are two, and only two, things that can happen to every dime you save for your retirement. You will either spend it, or you will leave it to someone else. Those jokes about the last check to the undertaker bouncing are funny, but nobody does that (voluntarily). 

Who knows when all this will be over. Soon I hope. 

But when it is over, would you rather have done your financial spring cleaning and be ready to move forward, or still sitting in a pile of mess, wondering what to do next?

Argent Advisors, Inc. is an SEC-registered investment adviser. A copy of our current written disclosure statement discussing our advisory services and fees is available upon request. Please See Important Disclosure Information here.

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