How Financial Plans Can Also Help in the Short-Term

Patrick R. Cote CFA, CFP® |

When most of us think about financial plans, the focus tends to be on the long-term, particularly retirement. That makes sense because most people need to save and invest money to help cover their future expenses when they eventually stop working.

When preparing a financial plan, it is also important to be ready for potential short-term financial needs. In 2024, a number of our clients across various ages, geographies and industries have been laid off from their jobs, making it hard to predict who is at risk for short-term financial needs.

Fortunately, as part of their financial plan, our clients took steps to position themselves well for a short-term financial need like a job loss. The rule of thumb is to save 3 – 12 months’ worth of expenses in cash or other very safe and liquid investments, depending on your family situation. High-yield savings accounts or money market funds are now paying about 5% in interest, which makes them attractive places to house your emergency funds. Having accessible savings is key to help make a tough situation like a layoff more manageable.

If you don’t currently have additional funds to put in an emergency fund, you might consider starting to put aside a small amount monthly in a money market fund or other safe instrument. Please feel free to reach out to us if you have questions about short-term or long-term financial plans.