As you have likely noticed recently, our world is currently in an upheaval. We just had our worst week in the stock market since 2008. The historic bull market that we have been enjoying for the past 11 years is now officially over. Gatherings of over 250 people are being banned all over the country and schools are closing left and right. 

Things just aren’t normal right now.

You are likely being inundated with messages about the coronavirus. Some are saying just calm down and stop buying toilet paper while others are saying go into hibernation, the world as we know it is over. It’s hard to sift through the messages to find the truth. And it’s even harder to find actionable advice that will make a practical difference in your life. 

Today I’d like to offer you some practical action steps that will be of great help to you if the coronavirus kills our economy as some expect. The good thing, though, is that even if the economy bounces back and nothing bad happens, these steps will still be of great benefit to you. This is a win-win situation with no downside, so it behooves you to take my advice.

1. Make Sure You Have An Emergency Fund

An emergency fund is a cash reserve sufficient to cover 3-6 months’ worth of living expenses. It is important that it is in cash so that you can access it at any time. Your 401(k) or other investments do not count as an emergency fund. As you’ve just seen, those can disappear without notice. A CD is not a good emergency fund either because you are locked in for a certain amount of time and have to pay fees to access your money sooner. Don’t expect your emergency fund to earn you interest, it’s insurance for protection, not an investment.

Is it too late to build an emergency fund now? As long as you’re still breathing, it’s never too late. Unless your income has dried up, you can start diverting funds into a savings account right now. Every little bit helps.

2. Understand Your Cash Flow In Detail

If you don’t have a budget, now is the time to make one. You need to understand your cash flow in detail. You need to get a handle on every dollar that comes into your possession and know exactly where it is going. 

Why does having a budget matter when the stock market is falling? Because pretty soon you may need to start cutting back your expenses. Pastors are in a unique situation. For most people, you either have a job or you don’t. In a recession, you either keep your job or get laid off. It’s an all-or-nothing prospect. 

With pastors, it’s different. When the economy turns sour, you will likely keep your job, but your paycheck may dwindle away. As giving to the church decreases, your income may shrink even though there is still plenty of work for you to do. You face more of a spectrum of income loss as opposed to the all-or-nothing that others face.

Thus, you may have to tighten your belt in the future even if you have job security. Having a detailed budget that already lays out all of your expenses will allow you to easily prioritize if you have to cut back. For married people, it also really helps to face written numbers together instead of feeling like you are facing off at each other.

3. Recognize Your Emotions & Responses

When you begin to invest, conventional knowledge says that you should try to discern your risk tolerance and invest accordingly. If you feel like you are comfortable with risk, then you can invest in riskier investments like stocks, especially stocks of small companies. If you’re less comfortable with risk, you don’t put everything in the stock market but add in more conservative investments like bonds and CDs.

It’s really hard to judge what your true risk tolerance is, though. You can look at this risk calculator to get a feel for the kinds of questions they ask. When filling out these questions in a safe environment, how do you really know how you would feel?

Now you can know your true risk tolerance level. Right now is a great opportunity to discern your true risk tolerance in a way that no questionnaire ever could. How are you feeling right now?

Personally, I’m feeling fine. I am not at all concerned with my investments right now because I am armed with knowledge and a long time horizon. I have confirmed that I have a high risk tolerance. But what about you?

If you’re freaking out right now or having trouble sleeping, God might be revealing something to you about your risk tolerance. Pay attention. Recognize your feelings and emotions and adjust your long-term plan accordingly once things smooth out. 

4. Find An Accountability Partner

In times of mass hysteria (and normal times as well), it’s important to have another person you can bounce ideas off of to ensure you aren’t behaving irrationally. This is one of the greatest services that a professional financial advisor provides. Right now, they are being inundated with phone calls from scared clients who need someone to calm them down to avoid making foolish decisions. If you work with a financial advisor, they could probably use your prayers right now. 

What if you don’t work with a financial advisor? It doesn’t take advanced technical knowledge to tell you to calm down. Just about any level-headed person will do. Many of us have spouses that can hold us in check. However, if both you and your spouse are prone to emotional behavior, you may want to find someone else to work with you as a couple. What your accountability partner should be telling you is Calm down and stick with your plan. The only people that get hurt are the ones that jump off the roller coaster. If you don’t have a plan, maybe you should reach out to a financial advisor. 

5. Remember Who Is In Control

I probably don’t need to remind you about this one. But I will anyway. Our God is bigger than the coronavirus. He is bigger than the stock market. He is bigger than the national toilet paper shortage. And he is in control and knows what is best for us. So, calm down and pray for peace both in you and around you. Instead of panicking right now, be aware of those panicking around you that need to be pointed to a greater source of security than the US economy and healthcare system.

There you have it. Five things that you can actually take action on. Now go do them. No matter what happens with the economy, you’ll be better for having done them.