Monthly Archives: May 2020

Planners’ Corner – May 15, 2020

Often, the Planners’ Corner is used to provide straight forward, actionable guidance from our planners and advisors. In these extraordinary times, it’s a piece of behavioral psychology that will beset the following text. We are working hard to provide insights into the changing world around us using a plethora of mediums – conference calls, blog posts, emails, phone calls, video chats, TV appearances, social media posts, etc. Yet we can’t discount that the world has seemingly tempered to a halt. As a community, we do our best to make do, but sometimes fear and anxiety permeate our best efforts at normalcy.

It was once thought that ostriches buried their heads in the sand to avoid danger. Although a reasonable assumption, it’s wrong. This hasn’t stopped the term “ostrich effect” from bleeding into the study of behavioral finance. The misconception about why ostriches bury their heads in the sand, led to a broad definition describing this effect as “avoiding exposing oneself to [financial] information that one fears may cause psychological discomfort.” As with every story, there are two sides – some tend to find themselves falling victim to the over monitoring of finances in periods of high uncertainty and volatility. Coined the “meerkat effect” due to a change in behavior that resembles more of a hyper-vigilant meerkat than a head in the sand ostrich. Regardless of whether we act more like ostriches, meerkats, or just humans – our built-in psychology can reinforce negative emotions in times of uncertainty.

Whether we like it or not, some aspect of the ostrich effect influences us within or outside of our financial lives – avoiding listening to a voicemail because we know its contents are undesirable, not checking financial statements for fear of unpleasant details, putting off an uncomfortable phone call, or unnecessarily rescheduling a filling at the dentist. We, as humans, experience this effect even with the most minor unpleasantries. Financial health is no minor detail. It’s easy for financial advisors and investment gurus to repeat the same truisms over and over in times like this to aid clients who are wading in murky waters. However, we should never discount the unprecedented nature of this pandemic as it relates to all of our ever-changing situations.

So why do ostriches bury their head in the sand? They dig holes to keep their eggs, and occasionally insert their heads into the ground to turn the eggs. They are nurturing, not hiding. This is time we can spend nurturing our financial eggs, controlling what we can control. Below are 5 steps we can take, together, to manage our financial and mental health during and after the novel coronavirus:

Talk to us, talk to others – We do our best to reach out to all clients personally, both prior to and during this time. Discussing finance, family, friends, canceled trips, or plans for the future are all suitable topics. We are here to listen to you, regardless of the topic. Communicating with our clients does as much for us as it does for you – we all need the personal connection right now. Remember to connect with those you love via phone or video chat or catch up with someone you haven’t spoken to in years.

Automate – Finances can fall by the wayside when our health is at risk. Manually making transfers, withdrawals, paying bills, and contributing to retirement accounts can feel tedious and stressful right now. Let us help you automate your financial life so that you can focus on what’s important.

Plan with real data – Financial planning is probably not near the top of many lists right now. However, I would be hard-pressed to find a better time to properly plan. Working together to understand and finetune your entire financial picture can be a great way to confront both sides of this psychological coin. Planning with estimates is good, planning with data is better. When we understand what is coming in versus what goes out while factoring in all assets you have, we can act faster with real data in times of need (good or bad). Please reach out to discuss formal planning and we will work together to realize its benefits.

Get informed – We work with some of the most intelligent clients out there, but no one knows everything about everything. Albion employees are working as a cohesive unit from home to deliver the most relevant insights and information for our clients. Following us on social media, attending our conference calls, keeping up with the blog, and dissecting our emails are great ways to understand where we stand on the most important topics facing the world today. We can’t cover everything, but we are willing and able to research or answer any tough questions that you have – don’t hesitate to make us your first call.

Take it slow, make a list – Whether we are busy or finding ourselves with too much free time, trying to tackle everything at once can be draining. We are here every day working to ensure your success but might not wholly understand what concerns you have for one reason or another – everyone has different worries and wants. Making a list of things we have been actively avoiding or overanalyzing is a logical first step. Acting on and completing this list over time yields the desired outcome. Small steps turn into big leaps with time.

COVID-19 Relief: Yellow Ribbon Network – May 7, 2020

The Yellow Ribbon Network is an online platform for veterans, active military and their families in need of counseling and resources to help with finances, housing, employment or education. The Yellow Ribbon Network has partnered with AFCPE® (Association for Financial Counseling & Planning Education®), whose mission is to ensure the highest level of knowledge, skill and integrity of the personal finance profession. AFCPE® aims to empower people to achieve lasting financial well-being through financial counseling, coaching, and education.

Together, The Yellow Ribbon Network with AFCPE® are currently offering free financial counseling to anyone who has experienced a negative change in income and/or budget due to COVID-19. This partnership has come about due to the widespread economic impact that COVID-19 has had on individuals and families. While the government has worked to expand public benefits and has distributed stimulus checks, there is still a great deal of financial stress and uncertainty for many people. The goal of this partnership is to help individuals navigate their financial situation in the short and long term.

The certified financial counselors and coaches will help you to make a plan and will provide you with unbiased, trustworthy advice. These sessions are available virtually – and are free.

An AFCPE® certified professional will never sell you products. They can help you to address your spending and savings plans, overcome debt, work through ineffective money management behaviors, and/or create a specific plan during this time of uncertainty. Your financial counselor will work closely with you to help you through today’s challenges and to develop a strong financial foundation for the future.

A member of the Albion Team donates her time as a volunteer CFP with the AFCPE.If you have additional questions about this service, please click the following link:

https://www.yellowribbonnetwork.org/COVID-19