- Posted by RAA
- On April 27, 2020
Whether you’re new to your airline, are beginning to plan for retirement, or are somewhere in between, it’s likely that the challenges facing the aviation industry are leading you and your family to plan for changes in your income. In turbulent times such as these, it’s perfectly normal to be concerned about your career and financial security, and wonder what you can or should be doing.
While we can’t predict what will happen in the future, we can offer some helpful guidance when it comes to protecting yourself and weathering the storm. Here are three important areas to focus on if you and your family are faced with a reduced income.
1. YOUR PRIORITIES AND GOALS
Before the COVID-19 pandemic struck, you probably had a vision of the things you wanted to achieve financially. These might include paying off debt, taking a family vacation, or saving for a child’s or grandchild’s college tuition. If your income is now less than what it was when you set these goals, you’ll need to revisit your cash flow and prioritize your expenses. This includes day-to-day and long-term discretionary purchases. If you don’t already have a written budget, now is the time to create one as you evaluate these adjustments.
Involving a professional in this process can be beneficial to help you understand how your spending and saving will affect your outlook both now, and when your financial plan evolves as the situation changes.
2. OPPORTUNITIES IN THE SHORT TERM
Although you will probably need to alter your short-term expenses to offset a reduced income, there are still opportunities to consider to improve your circumstances financially in this environment. The CARES (Coronavirus Aid, Relief, and Economic Security) Act has several provisions that might be advantageous to you, so be sure you understand them and how each fits into your specific situation.
Other opportunities to explore may include tax-saving strategies within your investment accounts and lower interest rates to refinance large loan balances, depending on your needs.
Finally, the recent volatility in the market might be causing you to lose sleep over your investment portfolio. Don’t panic. This is the perfect opportunity to seek the expertise of a financial advisor if you are currently managing everything on your own, to ensure you have a partner to work with you through situations such as this.
3. PROTECTING YOUR FUTURE
As the saying goes, “this too shall pass,” and we aim to help you feel prepared for when it does. While you are dealing with your family’s immediate needs, you can also look ahead to the future and what you can do to protect yourself and your financial stability. This includes ensuring you don’t cut any expenses that shield you from the unexpected, including insurance coverages, as well as avoid taking on any new unnecessary debts you’ll have to pay back later.
If you are considering early retirement, now is also a good time to review what that could look like for your finances and your family dynamic and take any steps to prepare.
Our thoughts are with you during this time, and we are here to answer any questions you may have about your financial situation. We invite you to download a copy of a checklist we’ve built from over 30 years of helping pilot families navigate financial challenges and changes, including a reduction of income and many more.
Along with using this checklist, you may also benefit from watching our video roundtable series, Unexpected Turbulence, to hear from members of the airline community on similar issues. Topics range from helpful insights on industry changes, to dealing with financial stress in relationships.