Before I move on, I want to make sure I learn. What financial planning concepts should I have learned from 2020?
2020 reinforced the importance of having an emergency fund. When everything is going great, the economy is booming, the market is up, no one likes having money sitting in cash earning virtually nothing. But when something unexpected happens, like a pandemic, health issues, or job loss, then you’re very happy to have these cash reserves.It’s advisable to keep 3 to 6 months expenses in your emergency fund in liquid assets. Think of your emergency fund like having insurance; you don’t really appreciate it until you need it.
– Randy Winkler, CFP, Manager, Annex Planning Team
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