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3 Financial Planning Lessons From the Covid-19 Pandemic

Julie Fox  |  September 16, 2021

Lessons learned from the financial challenges of the Covid-19 pandemic

The Covid-19 pandemic caused immeasurable health and financial trauma for many. 

When it comes to finances, the pandemic showed us how fragile money can be, especially if financial planning wasn’t a priority in the years leading up to the economic challenges caused by the pandemic.

Over my two-decade career as a financial professional, I’ve had a front row seat to multiple financial crises and have worked closely with clients to help them navigate financial uncertainty. 

The past year of challenges unearthed several important financial planning lessons:

Know the Details of Your Finances

It’s important to understand all of the details of your household’s finances.

The following financial information should be at your fingertips at all times: 

  • balances of your checking, savings, investment and retirement accounts
  • credit card debt balances (if any)
  • how much money your household earns and spends each month

Having familiarity with the simplest details of your household’s finances can lessen the stress of navigating a financial crisis. When crisis strikes, there is little time for a learning curve. 

Also, women typically outlive men, so it’s especially important for women to be involved in the details of finances and investments.

I remember speaking to several clients over the past year who unexpectedly lost their spouse and weren’t prepared to manage their finances on their own.

At UBS, we publish an annual report titled Own Your Worth that looks at a variety of data points on how women manage their finances. In our most recent Own Your Worth report, released in May 2021, we found that only 20% of couples make long-term financial decisions together. 

Have an Emergency Savings Fund

Maintaining an emergency savings fund is certainly not new financial advice, but the past year of challenges have cemented the importance of this.

It’s prudent to maintain at least six months’ worth of living expenses set aside in cash. If you are worried about job security, you may want to maintain 12 months’ worth of living expenses.

At UBS we can help you organize your financial life into three key strategies: Liquidity—to help provide cash flow for short-term expenses, Longevity—for longer-term needs, and Legacy—for needs that go beyond your own. The Liquidity strategy usually includes cash or conservative investments.* 

The emergency fund is part of the Liquidity category. This is money you may need in the near-term to cover unexpected expenses or sudden financial hardship, such as a job loss.

Beyond a short-term emergency savings fund, it’s important to think about how you’ll achieve long-term financial goals. The Longevity category is about investing for the long-term to ensure you’ll be able to meet various financial milestones decades down the line. Money in the Longevity category is typically invested in higher-yielding assets such as stocks, bonds or real estate, to name a few. 

Finally, Legacy is about taking steps now to ensure that future generations of your family are financially stable.

This may require the assistance of an estate planning professional to help ensure that your family’s wealth is passed to future generations in an efficient and cost-effective manner.

*Timeframes may vary. Strategies are subject to individual client goals, objectives and suitability. This approach is not a promise or guarantee that wealth, or any financial results, can or will be achieved.

The Dangers of Timing the Stock Market

While the stock market was very volatile during the beginning of the pandemic in 2020, the rebound in stocks over the past year shows the importance of staying the course in your investing strategy. 

Risk and volatility are par for the course with investing in the stock market. While market volatility can be painful to watch on a day-to-day basis, making sudden and knee-jerk decisions about your investments can do more harm than good.

Many times, investors attempt to time the market, instead of following a disciplined and long-term investment approach. Trying to buy stocks at the right time sounds like a sound strategy, but in reality, it often leads to inaction. The right moment never seems to come.

Figuring out the best times to buy and sell stocks is difficult. Tinkering with your investment portfolio too frequently may cost you over the long-term. 

The trick to saving for retirement is to simply start saving and stick with it. It’s old-fashioned discipline.

The commonality with all of these lessons is planning. If financial planning was on the backburner prior to the past year of financial challenges, it’s never too late to start planning for your financial future. 

While we can’t control the timing of future financial hardships, we can control how we plan for the future.


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