Mel talks to financial expert Elizabeth Evanisko, from Cetera Investors, about getting proactive when it comes to building financial security and during times like this. It has been an unprecedented year and Mel asks Elizabeth what she is telling people; how do you stop us from panicking when it comes to our money? Elizabeth says 2020 was quite the year. She says she thinks it was a really good stress test for people in a lot of ways particularly for their money. People felt good coming into 2020 when it came to their money. The market was doing well, and then March hits and all of a sudden people were like ‘oh my gosh, am I okay?’ Is my financial plan secure? It is a really important time to sit back and say okay March was our fire drill and maybe we weren’t really prepared and what can we be doing now to make sure we have a solid financial plan going into 2021.
Mel asks Elizabeth if it is ever too late. If you got yourself into debt during this time because you couldn’t work but you still had to pay your rent and you still had to pay bills so you racked up your credit card debt. How do you get ahead if you got yourself into this situation? Elizabeth says what happened in 2020 was there were two schools of people. There were the individuals who had to close their businesses and maybe had to take on debt. There are people who are still out of work and for those individuals the main focus is to get back on their feet. The second group are those people who are back on their feet or those individuals who may be have been working throughout. There may be some people who have more in their bank account than they are used to because they haven’t been able to anything or go anywhere and for those individuals it’s looking at debt and savings. Is there high interest debt that you should pay off? Should you look at remortgaging and taking a few years off your mortgage? The third part of that is the savings. If you do have extra savings where should those dollars go? It really depends on when you are going to use it. If you are in a place where you can save more and put yourself in a better spot to retire financially secure that is advantageous. Also, people who are currently retired; are they in a position where they can set up a legacy or setting something up for their grandchildren; those kinds of savings. Everybody’s situation is different and once again it so important if you are working with an advisor that you have a really good idea of what you should be doing.
Seventy-five percent of people don’t even consider seeing a financial advisor. Mel admits she always thought it was something rich people did, having someone manage their money. Elizabeth answers by relating it to fixing your brakes. You can figure out how to fix your brakes; you can go out and buy a book, and go in your garage or driveway and try and fix your own brakes but at the end of the day brakes are pretty important so generally you take it to a mechanic someone who does it all day, every day without thinking of it and that is kind of what a financial advisor is too. She goes on to say this is what we do all day, so we are able to take that stress off you for sure.