Navigating Economic Disruptions: The Power of a Financial Plan

May 11, 2020

At Blue Trust, we offer strategies and concepts to help our clients navigate through all of life’s journeys, including periods of economic disruption. Although we believe a comprehensive financial plan is important in any environment, today as part of our “Navigating Economic Disruptions” series, we highlight how it can help give clarity and confidence in your decision making during the current crisis.

The following was written by Nolan McClure, a Financial Advisor with Everyday Steward ^(R), a division of Blue Trust.

My wife and I are using a set of children’s daily devotional cards with varying prayer topics and Scripture references to pray with our son each morning. He is only two years old so these family devotions tend to be brief. This morning’s prayer topic was “Our Leaders,” and the Scripture reference was 1 Timothy 2:1-3.

“I urge, then, first of all, that petitions, prayers, intercession and thanksgiving be made for all people, for kings and all those in authority, that we may live peaceful and quiet lives in all godliness and holiness.”

As a family, we prayed for the leaders of our country, businesses, churches, and school systems as they navigate these difficult times. Although leaders carry an extra burden of responsibility, during times of crisis like the coronavirus (COVID-19) pandemic, making wise decisions can be difficult for everyone.

Working out of the National Office of Blue Trust in Atlanta, I’ve had the privilege of spending a significant amount of time around some of the leaders who started this organization 40 years ago. From our conversations and from my own experience as an advisor, I have learned that the foundation of financial planning is not just about increasing your net worth, but it is ultimately about making life decisions with wisdom and purpose. The current global pandemic has created an extremely challenging environment for people to find peace in making those tough decisions. However, we believe financial planning based on God’s Word is designed to help people make wise decisions and have clarity and confidence around their finances.

Blue Trust’s financial planning approach is based on biblical principles, which we believe are timeless. However, we have found that challenging times like these are when our clients have relied on their plans the most. I have spoken with clients who say they are at peace with their investment decisions, despite the current market volatility. I have heard comments from clients who said they are able to sleep peacefully at night because they have followed their financial plan and are living debt-free in the midst of the uncertainty. And I have watched business owners apply our financial planning principles to their business in order to make difficult decisions regarding cash flow planning and the wise use of debt during these periods of decreased revenue.

Not only have I seen this financial clarity in my clients’ lives, but I have also experienced it in my own life. In February of this year, right before the pandemic started to dominate the headlines, my wife and I began the process of selling our current home and buying a new one. As market prices fell and businesses began to shut down, we wondered if we were foolish to move forward with our plans. When the situation worsened, we experienced the fear that uncertainty can bring.

Even though I am a financial advisor, my wife and I have a Blue Trust advisor to help guide our personal finances. When the anxiety and fear were sinking in, we closely reviewed the details of our financial plan. A few things quickly became evident, which reflects the planning principles that we believe are important, especially during times like these:

1. Get out of debt. We had followed our financial plan years earlier and worked diligently to pay off our debts, including our student loan debt, so we had freed up margin to improve our cash flow position.
2. Spend less than you make. As we tracked our cash flow, we knew our income and how much our family needed for expenses. We were able to select a new home within a price range that would allow us to still spend less than we earned.
3. Diversify and invest based on when money is needed. By following our investment strategy, we had money set aside in short-term investments, which were not impacted by the surprise market volatility. This enabled us to move forward with our home purchase and maintain an emergency fund. Our longer-term investments were impacted, but they have ample time to recover as they are in long-term strategies and will not be needed for some time.
4. Continue to be generous. Even in the midst of this economic disruption, we knew we would be able to cover our mortgage payments, meet the needs of our family, and continue to be generous to those in need.

Buying our home was an important part of meeting the needs of our family. The circumstances of the pandemic did not change that. After a thorough review of our financial plan, we easily made the decision to move forward with our home sale and purchase with absolute peace of mind. That was the power of our financial plan in our lives.

The beauty of financial planning based on God’s Word is that the core principles are always right, they are always relevant, and they never change. They are able to help lead and guide us into wise decision making no matter the economic season or uncertainty that we face.

As Chief Mission Officer at Blue Trust, Russ Crosson has been sharing these financial planning principles with our clients for more than 40 years. If you are interested in hearing more about how these timeless principles may help you with your planning during times of uncertainty, I would encourage you to watch Russ’ video, Financial Freedom in Fearful Times, by clicking here.

If you would like to learn more about developing a financial plan, please contact a Blue Trust advisor by calling 800.987.2987 or emailing blog@bluetrust.com.

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Scriptures taken from the Holy Bible, New International Version ^(R) NIV ^(R) Copyright ^(C) 1973, 1978, 1984, 2011 by Biblica, Inc. ^(TM) Used by permission of Zondervan. All rights reserved worldwide. www.zondervan.com. The “NIV” and “New International Version” are trademarks registered in the United States Patent and Trademark Office by Biblica, Inc. ^(TM)