Pandemic Proofing Your Finances

I attended my very first Sun Life webinar last April and found it to be very informative. I thought it was going to be a sales pitch for VUL backed insurance masquerading as a personal finance webinar, but I was pleasantly surprised that life insurance was only given a cursory mention. Good job Sun Life!

Anyway, the webinar began with the speaker, Jennifer Del Mundo, defining a financial plan as a useful tool that ensures that you can carry out your goals and milestones. She then explained that an effective financial plan should be based on the following:

  1. Present and future life stages and what you want to achieve in the short term (1-5 years) and long term (5-10 years);
  2. Certain or expected events (i.e. education, retirement, personal goals like owning a home or car, traveling etc); and
  3. Uncertain or unexpected events (i.e. natural calamities, death, pandemic)
Del Mundo continued by summarizing her presentation into the seven choices one can make to create a pandemic-proof financial plan.

First is to set clear goals. She suggested beginning with the end in mind or having a clear picture of what you want, and then working your way backwards, figuring out the steps which would lead to your goal.

Second is to have a consistent habit of saving, where you regularly pay yourself first.

For the third choice, she emphasized the need to create an emergency fund of 3-6 months worth of your expenses. She then segued into her first pandemic proof tip which is for business owners to also create an emergency fund exclusively for their businesses. She said that in creating a business emergency fund, the business owner should account for financial obligations which must continue despite the ECQ and lockdown and set aside 3-6 months worth of these projected expenses.

Fourth, she declared the necessity of taking out death and critical illness insurance for breadwinners. For her second pandemic proof tip, she suggested that in dual income households, both breadwinners must be insured in proportion to their respective shares in the household income/expenses.

Fifth, she highlighted the need to make your money work for you by having a well-balanced investment portfolio. Pandemic proof tip number three was to have diversified investment portfolio because in times of a pandemic, you need access to liquid funds so you won't be forced to redeem equity investments at a loss. She then stressed the importance of having short term investments within your portfolio for easy access.

Another, pandemic proof tip was to reduce your risk exposure the nearer you are to your set deadline. This way, retirement funds will not be subjected to the full force of market volatility.

Sixth, she recommended building a financial plan with a financial advisor. The financial advisor will then implement and regularly review your financial plan.

Finally, she encouraged everyone to stay the course by working towards their goals and keeping the end in mind.

She ended her presentation by reminding everyone to be committed to their financial plan and to recalibrate as needed.

The webinar lasted for about 1.5 hours and I found it to be paced just right, with the speaker clearly speaking from experience and not from some ivory tower. It was also a competent summary of the tried and tested best practices floating around in the personal finance sphere. 

All in all, it was a good way to spend the afternoon and I can't wait to see what webinar Sun Life has lined up next. Salamat Sun Life!

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