Now that 2020 is officially the weirdest (and possibly hardest) year of our lives, it feels like it’s time to stop and pick up some of the pieces.  It’s still uncertain when or if life will ever go back to the way it was, or if there’s just a new normal.  Most folks are over the hysteria part of COVID, but the consequences are still real, and we now are dealing with a whole host of other issues of injustice, politics and wondering if college football will really happen in a few months!

Despite all of these questions and uncertainties, the stock market has seen a furious rally.  In fact, most folks who have refused to look at their statements will be mostly presently surprised to see things just about where we were to start the year!  But we’re still off from the highs, and some folks’ income is either dented or devastated.  On the positive side, most folks’ expenses are also down since there’s not a lot of going out on the town right now.

What are we to do with all of this from a financial planning perspective?  Are our best laid plans totally scrapped now?  Do we need to reset and reassess our long term goals such as retirement?  The answer to that is clearly Yes and No.

The case for No

The only certainty in life is uncertainty.  A grand total of zero people predicted that this is what 2020 would look like.  And precisely that many people know just what next year or the year after will hold either.  We don’t make financial plans based on a specific road map, but instead as a pathway to see what sort of trajectory we’re on.

When we make a financial plan, we’re planning for some disasters to happen.  We’re planning for uncertainty, volatility, and panic.  We do this because these are part of life, and they’ve always been part of investing and money.  We don’t know what they will be, when they will occur, or how bad they will be.  But we know they’re coming and can’t be avoided.  If we “run the numbers” on your plan right now, they will look worse than they did in February, because your retirement accounts likely had more money in them.  But that doesn’t mean that your plan is off, it’s just the reality that your overall financial plan will look better or worse at different points in time.

The case for Yes

You know it’s time to update your plan when something substantial in your life has changed.  If your income is semi-permanently damaged; if you sold out of the market at the bottom and missed some of the ride back up (thankfully most of you followed wise counsel and some of you even managed to buy some cheap stocks!); if your goals have changed.  Market swings are a normal part of investing, but sometimes other factors have changed which would necessitate an update.

The other reason for redoing your plan is if you’re convinced that the “new normal” will make it harder for companies to be profitable, and that over the long haul (20+ years) stocks will have lower returns.  We can always adjust your plan to use more conservative assumptions going forward to see how dependent you are on a certain rate of return, or to see what sort of impact you can make by reducing expenses or working an extra year, etc.

Ultimately, the problem that we get in with financial planning is planning our future based on a specific snapshot in time.  My plan always looks better when we’re on a mountaintop vs in the valley.  Unfortunately, it’s impossible to know which one I’m on until I get down the road a bit.  However, looking back over a period of time, we can see real progress.  We can see growth and make a plan going forward based on history and reasonable assumptions.

In the same way, my marriage or relationship with God isn’t necessarily defined by a single snapshot, if I’m on a particular high or low point in the relationship.  I can feel better or worse about the relationship depending on how things have been going lately.  But I can look back over a long period of time and see the real progress that’s happened.  I can also make a plan for deepening these relationships and hopefully you have a plan for these as well!

So definitely have a plan, and keep updating your plan.  But don’t judge your plan over what happens in a few months, and don’t let your hopes get too high or too low.  Because while we draw our plans in pencil, God holds the eraser, and often has much better plans in store for us than we can ask or imagine.  Because ultimately His plan is not for you to have financial success, but for you to depend on Him, grow in Him, and have life to the full!