Sonya Moore's small consulting firm was only 18 months old when COVID-19 began spreading across the country and the Tri-State, forcing small businesses of all sorts to close their doors.
“As most small business owners, I was extremely nervous," she said. Her firm, Moore Planning and Consulting, handles strategic planning, project management and other needed executive services.
She had one advantage: She was already conducting her business virtually before the pandemic made it the norm. However, many of her business clients, most of them small businesses, were having trouble.
"Some of them were hit very, very hard and having to close the doors to their business," Moore said. "That meant that I was having reduced income as well."
In addition, the market fluctuations are enough to send some reaching for their 401(k)s to help them get through the pandemic-induced economic downturn.
Apryl Pope, certified financial planner and owner of Pope Financial Planning, works hard to keep her clients from taking that leap and having other reactions to the pandemic that could actually do more harm than good.
“It takes a long time to come back," Pope said. "So, once you pull that money out, it’s not like, ‘Oh, I’m just taking out a few thousand.’ That money could have been earning 10, 12, 20, who knows what percent."
In addition to advising clients not to borrow from their 401(k)s, Pope also advises them to look at their retirement funds.
“What are you invested in?" she said. "Are you invested properly for your age, for your goals, for your risk tolerance?"
She said there may be times when her clients should make changes if they need to redirect their money to areas that will work better for their needs.
“Maybe switch some things around or ask your adviser for help on that, because you really want to be sure you’re invested for what your goals are,” Pope said.
Although no one thought we would find ourselves in the middle of a pandemic, emergencies are usually unpredictable. That's why she stresses to her clients to put money aside for financial emergencies.
“I always teach this," she said. "Three to six months. You need to have it. And, people do it but it’s like, 'When am I ever going to need three to six months? I don’t really need that.' People have now run through their entire emergency fund.”
Pope also said since some people aren't shopping as much, now is also a good time to save that money. It's something Moore said she is already doing.
“Whether it’s cable or whether it was going out or whatever it was, as we’re looking at our budget, we had to make some very tough decisions and use this opportunity to cleanse,” Moore said.
Meanwhile, Pope has also heard from those ready to retire, but may need more than they have invested.
She said she normally works with clients to assess what other funds are accessible for retirement while investment funds continue to grow.
“Again, this money is not designed to take out," Pope said. "You’re not hitting 65 and just taking all of your money out of your account. You still have time for it to come back.”
Moore said even though they have had to reduce spending, she sees advantages in going through the process of weathering difficulties.
“Whenever there’s a down, that’s a lesson," she said. "That’s an opportunity for me to think what am I learning from this? How can I come out better?”