The pandemic may have hit your wallet hard. Here are some lessons we can learn from this unprecedented time.

he reverberations of the COVID-19 global pandemic have been a wake-up call for many of us as we scratch our heads over our finances: Are our wallets in disarray or have we come through this pandemic well? Are we prepared for what comes next or should we re-evaluate our outlook? Ryan Lanaus, a financial planner with TD Wealth Financial Planning, says many of us may not focus on our finances until a crisis hits.

“I’ve talked to many people over the past month, some incredibly anxious, and once I’ve talked to them about how well-balanced their portfolio is, the nervousness goes away,” he says. “I’ve found that when you put events into perspective and give them faith in the decisions they’ve made, they are relieved.”

Lanaus says now can be a good time to look at your overall financial picture and even make some changes. Here are five lessons we’ve learned during the COVID-19 pandemic that could help you gain confidence during any financial crisis

Lesson No. 1: Spread your investments out

The market drop in the wake of the COVID-19 pandemic has shown us the wisdom in diversifying our investments, Lanaus says. That means not putting all our eggs into one basket in case that basket gets upset. In recent months, some investments performed considerably worse than others. For example, travel-related companies such as airlines, for example, were struck harder than gold mining companies. Some types of investments offer different characteristics such as income or dividends, and some types are by their nature less volatile than others, such as utilities (low) vs technology shares (high). By putting a percentage of your funds into different types of investments, as you can through balanced mutual funds, for example, you minimize the chance that one economic event will harm all your investments equally. But if all you own are growth-oriented mutual funds or high-tech funds, depending on your situation, you may wish to expand your investments into different classes.

Lesson No. 2: Invest for the long term

It may not seem fair to see investments you’ve held for years lose a good chunk of their value in a couple weeks, but the short, sharp drop only emphasizes the long-term nature of successful investing. It takes time, patience  and these days  an abundance of resilience to build up a portfolio for a long-term goal. Investing is a focused business and there are few elements more important than the effect that compounding interest can have on small but regular savings over the years. To see how compound interest works and to learn how your investments could grow over time, check out this compound interest calculator. There will be setbacks, like the one we are now moving through. But we know looking at historical data, that even in the darkest days, the markets bounce back and go on to greater heights. Lanaus recalls the last recession when giant companies were falling: The world survived, and we have thrived. He points out that abandoning some investments during a downturn may temporarily ease a sense of panic, but believes many stocks will rebound. Those who sold at the bottom of the market would miss the chance to enjoy the comebacks that follow. If you had sold then, you would have had to deal with losses and not enjoyed any of the comebacks we are now experiencing.

Lesson No. 3: Check your risk tolerance

The markets may have also played a role in raising your personal anxiety, so we should also talk about how you, the investor, may be reacting. Your level of worry has to do with how much risk you can manage, both in your investing plan and as a human with your money on the line. Every investment carries some level of risk. While Guaranteed Income Certificates (GICs) carry less risk, they may not be enough to achieve the investment goal you want. On the other end of the scale, shares of junior resource companies can conceivably bring stunning returns, but are hazardous as many fail to become profitable. Most investors should have a balance of investments to mitigate risk and align to their tolerances. So, if you were comfortable with your investments during the recent market weakness, you may not need any changes to your investments. If you are still biting your finger nails, perhaps it’s time to settle on what investments make you feel comfortable through good times and bad.

Lesson No. 4: Debt can drag you down

Your personal pocketbook may have been hit hard in the past few months. For many impacted by the recent economic turmoil, living paycheque-to-paycheque may have made things worse. This is especially true if it forces you into racking up high-interest credit card debt to see yourself through. It may be shocking how easily unnecessary spending can eat into our finances. The lesson learned is to avoid getting yourself into that vulnerable position in the first place. Lanaus says that could mean it’s time to re-evaluate your budget and financial plan. One simple way to see if you are in good shape is if you are able to pay off your credit cards monthly. If not, tracking how much money is coming in and going out can be one way to get back on track. You can connect a savings plan with some sound goals, such as a retirement plan, an education plan for your kids, and even an emergency plan. If you are meeting the needs of sensible goals, you may be in good shape. If you’re not, your spending and saving habits may need work. In many cases, you can track your spending habits using a banking app, such as TD Myspend.

Lesson No. 5: Reflect on this unique time

There’s no doubt that this has been a sobering experience for Canadians and the whole world. But if you have escaped the brunt of COVID-19 and its economic consequences, you might think about non-financial lessons that are to be had. Perhaps you are spending more time with family than ever before  maybe under uncomfortably close circumstances. Hopefully we’ve all learned how to be efficient and happy while living on top of each other, how to cope with your own and each other’s stress and how to handle a world where toilet paper is a hot commodity and the hockey season just…stops and…starts up again in a bizarre new form. If you are cooking more and eating out less, you are probably saving more money (and becoming a better cook). You might want to consider making that a permanent lifestyle change along with taking a daily walk and calling your mom every few days. Everybody’s experience of this time will be unique, and everyone will have a different story to tell. With any luck, this time has reminded us what’s really vital to us.

Investing, saving, and planning activities, as well as taxation, life insurance and an estate plan, must be closely connected to one another and be directed towards your goals, such as retirement at a certain age with a certain amount of funds. We may all have dreams but if you really want to make them happen, Lanaus says, it’s time to start working out what they will cost. If you do have a retirement plan in mind, you may want to run some numbers through this retirement calculator. Without a well-rounded plan, individual tactics may actually work against you. With all the lessons you’ve learned during this time, you may want to give your finances a new start, whether by yourself or with a financial professional to help ensure you’re in good shape to make your financial plans become realities.