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Making it through uncertain times: 4 financial lessons from 2020

The coronavirus crisis has imposed unprecedented challenges on businesses and individuals around the world. But at the same time, it’s provided learning opportunities as well. A crisis situation can reveal what needs to change in order to have the financial stability and power to survive—and thrive—through periods of uncertainty.

No one should feel alone as they navigate the unknown and manage their finances in tough times. Whether you’re looking out for yourself and your family or running a business, one of the biggest lessons to realize is that your financial partner is there to lean on and help you plan for the ongoing impacts of an economic downturn.

Lisa Colangelo, the SVP of Retail Banking at Coast Capital, has managed a brand-new set of challenges and priorities as her credit union supports its employees and members throughout COVID-19. Here are four key lessons she has to share about staying the course—and seeking out help when needed:

1. Being adaptable and proactive are important to financial success

Coast Capital has high aspirations for making a difference to the members and communities it serves. In a coronavirus-afflicted time, achieving this requires everyone at the credit union to consistently embrace change and proactively put new efforts into action. Coast’s retail and business customers should apply a similar mentality to their finances, especially knowing that their financial partners are standing by.

“If COVID-19 has emphasized anything for our members it’s the importance of a financial plan,” says Colangelo. “It’s up to us at Coast to make sure that we help them put a financial plan in place to weather the worst storm.”

Being proactive about creating a plan starts with taking stock of where your finances stand. From that baseline, you can figure out how to adapt your current spending, cut back on expenses, and begin setting funds aside to prepare for the unexpected.

“The most important proactive measure you can take to ensure you aren’t finding yourself in a financial crunch is to shore up your emergency fund,” says Colangelo. “I refer to it as your financial parachute—you can deploy it when you need it, and just knowing it is there will make you more confident and certain.”

2. Trusted relationships can be motivators for good money habits

Helping Coast Capital members navigate the unexpected has been easier during COVID because they know the credit union has their best interests at heart. “The big thing I’ve learned is that our members do trust us and look to us, and we’ve demonstrated that we can be there for them,” says Colangelo.

A critical service a financial institution can provide is helping you to save—one of the most basic, but toughest financial tasks. “We get Coast Capital members set up with automated savings so that the savings grow without having to rely on willpower alone,” says Colangelo. “We tell our members to work towards having six months of expenses in a high-interest savings account that is untouched and ready.”

A signal that money management needs have changed during the crisis is the growing necessity to seek out financial information. According to data from BCG’s Retail Banking Excellence Benchmark study, remote and virtual financial advice is seeing a 3x increase in demand, and a 92% customer satisfaction rate.

3. Working together sets customers up for success

In addition to Coast Capital’s focus on boosting members’ savings, the credit union has also used many creative efforts to engage members in ways that rise to the uniqueness of pandemic conditions. These include digitizing many paper-based forms, transforming closed branches into virtual member care centres (VMCCs)—responsible for conducting proactive outreach to members and helping them with deferrals—and launching efforts to help more customers, including seniors, engage in self-service banking in a trusted, reliable way.

For instance, says Colangelo: “One of our branches is located near a retirement community, many of which are Coast Capital members. We used community funds to set them up with iPads and teach seminars on digital enablement to help ensure that they can bank, even though they can’t go in to their usual branch.”

Digital banking isn’t the only way businesses and individuals can lean on their financial institutions for help. Credit unions like Coast Capital offer many products and services designed to help customers navigate uncertainty—many of which have experienced increased use since COVID-19. These include dedicated financial advisory (up 31%) and savings products with flexible, cash-out options (up 31%), according to BCG’s Benchmark study.

4. Market volatility should always be expected—not just in tumultuous times

The year 2020 experienced a high level of market volatility—and 2021 may prove even rockier. But according to Colangelo, market ups and downs are part of life—and sticking with your investments tends to be a wiser choice than changing your strategy during times of uncertainty.

“You should certainly be aware of what’s happening in your portfolio, but unless you are edging up to the time you will be dipping into your investments, the best thing to do is sit tight,” says Colangelo. “Over the long-haul if you have a solid investment strategy, you likely don’t have to worry about the hiccups that events such as COVID cause in the markets.”

That said, investors all have different goals and timelines with their investments. Risk appetites change over time, and a trusted financial advisor can help ensure your investment approach syncs with your long-term objectives. “Revisit those components with your advisor on a regular basis to ensure that your investments are working as hard as they can to help you reach your goals,” says Colangelo.

Surpassing hurdles and headwinds

Around the world, the resolve of businesses and individuals has been put to the test. But if you’ve made it this far, you’ve learned just how resilient you can be. Continue to work with your financial institution and other wealth partners to further ensure you feel supported and secure even if the future is hard to predict.

“If we can do in 2021 what we did in 2020 with all the headwinds, we’re unstoppable,” says Colangelo. In reference to the pandemic, “as I look forward to the vaccine, I’m feeling highly optimistic,” she says. “We’re getting through the worst of it and by mid-next year it’s going to look a lot brighter.”

For 2021, Coast Capital members should update their advisors on any changing financial priorities. If you don’t already have a trusted Coast Capital advisor, try a money chat to discuss potential financial tools and solutions.

For more articles and information on money management and how to navigate COVID-19, visit Coast Capital’s blog The Help Hub.

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