My life is whizzing ahead, both personally and professionally. I’m married, raising two young children, promoted to principal of my school, and managing the household finances. With the constant changes that we have seen over the last couple of years with Covid and the fluctuation of the stock market changes, how can I best plan financially if school closes and if there were a stock market crash?
Dear Planning Penny,
Hopefully, you’re investing in the stock market in your retirement accounts, and downturns in the market help you by allowing you to purchase more with the money you are allocating to those accounts. It sounds counterintuitive, but really works. Money you would need in the short term shouldn’t be put into the stock market, which can be so volatile. Also, best case, you are putting money aside each month into an emergency fund to cushion your budget should the school close. I always recommend having several months of expenses saved to get you by should you lose your job, understanding that may be difficult to do. Minimizing debt will help your monthly cash outflow, allowing you wiggle room with your spending. If you have a partner, the two of you can sit down each month and plan what the coming month looks like, deciding how you will spend each dollar that comes into your household. It allows a more proactive approach to spending, rather than watching the dollars float away, as can easily happen when we are so busy living our lives. It takes being intentional, which is hard when juggling all the pieces of our lives, but in the long run pays off.