As you put the pieces back together and rebuild your emergency fund, keep in mind that Covid-19 is still alive and well, despite the shift to Omicron, a potentially less severe but more transmissible form.

It's a good time to review your personal finances. Interest rates are going up, the stock market is in correction mode, and inflation is on the rise. Combined with Omicron, this could make 2022 a bumpy ride. Contact your financial advisor if you have one. If not, reevaluate any plans that you might have in the following three areas. 

1. Retirement Savings and Timeline

The IRS increased the maximum 401(k) contribution level to $20,500 for 2022. In normal times, that would be a strong motive to increase your contributions. With the uncertainty of Omicron and a stock market in decline, opting for a more conservative savings option might be a better choice. Bonds and savings accounts don't yield much, but they don't lose money either. 

As for a retirement timeline, there is a phenomenon known as retirement "sequence risk" that you need to watch out for. Retiring during a down market means you'll lower the principal in your retirement savings account early in your golden years. That shortens your runway. It might be better to wait a few years and retire when you're a little older.       

2. Home Improvement and Renovation Projects

This is a hurry-up or wait scenario. Interest rates are low right now, but they won't remain that way for long. The Federal Reserve has already announced that it will do multiple rate hikes in 2022. If you need a home equity loan for an improvement or renovation project, get it now. It could be several years before we see interest rates come down again. 

If you're not able to act immediately, waiting is probably your best strategy. Omicron will further disrupt the supply chain, cost contractors man-hours due to sickness, and slow down any residential construction projects. Wait until it's all over. 2023, provided there are no new variants or an increase in virulence, should be a better time to build and repair.      

3. Recreation, Entertainment, and Vacations 

Build up your savings and plan a trip for next year. Omicron is raging on a global scale, and you really don't want to travel right now. Recreational activities should be limited to those involving small crowds, and entertainment is available at home. It's tough to deal with after the past two years, but we're not out of the woods yet and plan for the future. Be conscious of that in your savings and spending.  

The Bottom Line: The Covid-19 Crisis is Almost Over

We see a lot of headlines claiming that "It's Not Over Yet." Try not to look at it like that. The Covid-19 crisis is almost over. You've probably already seen that Omicron is affecting a lot of people, but far fewer are dying from it. This is the progression of a virus. It mutates and becomes more transmissible, yet it's far less potent. That's good news.