Financial planning is more than just money, it's also a mindset

In light of social distancing, numerous businesses have limited operations or closed entirely. However, this means more than simply missing out on shopping and dining opportunities; for some, it also means unemployment.

However, even if you still have a job, someone else's unemployment can still affect you. Maybe it's your favorite restaurant that gets closed, or the auto-shop had to lay off employees and you can't get your car serviced. It's important to have a financial plan in your pocket, but it's also important to maintain perspective and have a flexible mindset so that you don't become overly flustered by setbacks.

As Niwot's Seven Wealth founder Adam Robinson says, "A healthy perspective can be the difference between being a victim or a phoenix." Seven Wealth was created out of the hope to both help its clients plan and invest smarter financially, but also inspire people to live more fully.

One place where Robinson finds that people struggle is in the planning process. "Most people don't take time to make an honest assessment of where you are and where you want to go." So, he advises people to start there. When it comes to money, it's important to not be reactive and say, 'I'm going to pay all my essentials and save whatever's left over.' It's better to be proactive: identify your limits and figure out how to build your lifestyle around them.

Similarly, Dan Hawk of Edward Jones in Niwot said, "It's not hard to join the crowd and start selling, in an attempt to cut losses." He argues that by selling investments to 'cut losses,' it really locks them in place.

However, when something like the Coronavirus hits, it's difficult not to fall victim to uncertainty and fear of losing control, two big elements of being in survival mode. So instead, his advice is to focus on what you can control--just like how now is a great time to start taking care of yourself physically, it's a great time to reassess what's important to your lifestyle.

So, it's important to figure out what to do in the short and the long term, especially since it's unclear how long the current situation will last.

Going back to the idea of perspective, try not to panic--if you have a 401(k) or stocks, be careful. If you try to withdraw more money than you need from your 401(k), you could end up hurting yourself with the tax hit more than you realize. Try seeking out a financial planner for advice first. Similarly with stocks, people are buying up sold shares for when prices recover.

The market is always fluctuating and it comes down to how comfortable you are with taking risks. Hawk cited the fact that the nation entered into this pandemic with low unemployment and a good housing market as reasons to support an economic rebound. "The worst of the stock market pain has already been endured," he said. "Of course, there are no guarantees."

For the long term, it's necessary to figure out what financial and life goals actually matter, how you plan on getting there, and how you'll hold yourself accountable to your plan. When you take the time to be intentional about your planning process, it helps both in general, and especially in times of crisis. "Planning keeps them [people with specific plans] calm and steady. It doesn't mean they aren't fearful," explained Robinson. "But it does help them to weather the storm by focusing on the big picture and avoiding the temptation of making emotional decisions."

Hawk echoed Robinson's advice, encouraging people to use this as an opportunity to use some discretionary spending money to "beef up emergency savings and consider investing more." Just like professional investors will use this time to buy when prices are low, you can too. As for those who will be getting money from the CARES Act, he says that if you don't immediately need the money, putting it in a low-risk liquid account as an emergency fund is a good option.

"Remember why you're investing," said Hawk. "Keep in mind that your financial goals, such as a comfortable retirement, are longer-term than the shelf life of the coronavirus. These goals, not today's headlines, should guide your decisions."

So, it's also important to revisit and revise whatever plan you create. Planning isn't perfect and goals change, so having a sense of flexibility is crucial. "It [your plan] doesn't go perfectly to its destination, you make little adjustments along the way," Robinson said. "Stay positive, and surround yourself with people who can promote that."