You already know how important dollar cost averaging and re-balancing is to long term financial success, so I won’t go into either of those. During our time in quarantine though, I do want to give you 3 other components of financial success to think about.
1. Creating a crisis budget: Though this is often the least appealing financial principle to discuss, having a crisis budget is important for uncertain times, like the one we are in. Take this time you have to re-evaluate how much you have in your emergency bucket, and whether you should add to it.
2. Reducing interest rates on debts: This idea is subjective and relative, but with federal fund rates reduced to zero, you may have an opportunity to refinance higher interest rate debt. The correlation is not one-to-one as it relates to federal funds, of course, but historically speaking, interest rates are at near bottom.
3. Reinvesting in YOU: You will always be your greatest advocate; take this time for personal growth! This will mean different things to different people, but consider educational opportunities, either formal or self study, positioning yourself for career advancements, or even picking up a new hobby. Find a way to be a better you in spite of these challenging circumstances. You probably already know what you should do.
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