SURVIVING A SCARY FINANCIAL CRISIS
How do you survive a scary financial crisis? What do you do when life is full of uncertainty and so are your finances? What are some ways that you can ensure that everything will be OK?
Obviously, not every situation will be the same and not everyone will have the time to prepare in advance. When a scary financial crisis happens, it typically happens unexpectedly and without warning. What you can do right now though is make a plan. Whether you are dealing with a present situation or preparing in advance it is never too late. You might not have as much time and resources if this is a current crisis but little changes can still make a huge difference.
6 ways to prepare for a scary financial crisis
1. Create a budget
2. Save Save Save
3. Eliminate unnecessary expenses
4. Create an emergency fund
5. Pay off debts
6. Keep your credit in good standing and keep your debt to a minimum
Free up more money in your budget
Eliminate unnecessary expenses - As I mentioned above eliminating unnecessary expenses is extremely important. You should always strive to keep your monthly expenses to a minimum if at all possible. I prefer to pay for things in full when I have the money to prevent an extra monthly bill. If you don’t have the money to pay outright you might want to reconsider that purchase. This is why my husband and I do a "No Spend Month Challenge" from time to time. Cutting everything as much as possible for practice makes it easier when things are tough.
Make sure you stay on budget - Keep your budget up to date and know what is coming in and going out. This helps to keep you on track financially in every area. You can save much more and invest much more when you know exactly what is left each week.
Commit to the tough choices - Make yourself a promise that no matter what you are going to make a difference in your finances. You do have to make a commitment to yourself to ensure that you will stick to the plan. This is how you can really make a significant difference over time. Don’t expect immediate results. Having someone working with you to stick to your plan is another good way to stay on track. Your spouse or family or roommates are usually in the same boat, and if you trust them, they can make good accountability partners.
How we are handling the scary financial crisis
Today I am personally dealing with a scary financial crisis as many others around the world also are. My husband was laid off for a few weeks during the beginning of the United States Corona virus shut down. Both of our jobs are just as uncertain as many others around the world right now although we are now currently working. My company did a round of layoffs just recently that are expected to be only temporary but they also warned of the potential for more in the future. I recognize that although we have both been many years with our respective companies neither of our jobs are completely secure. Over the next few months, we will be focusing on a few areas that are important to keeping our financial life secure.
Our focus ensure a better financial future
Building our savings accounts. We used some of our stimulus to replace cash we have had to use lately.
Paying close attention to vehicle maintenance. Our car needs tires soon and we have been saving up for this purchase.
Taking care of our health. We are buying fresher food and exercising so we can save on medical costs later on and just feel better.
Waste less around the house. Not letting the last of the bread go stale and making more meals helps us spend less on eating out. Using fewer paper products means fewer trips to the store.
Find additional income ideas. For me, this would be working hard to build up my website, the possibility of doing some freelance writing, and a few market research opportunities that I am choosing to participate in.
Investing in things that we feel will hold their value over time. For example, my husband has looked into the value of U.S. Silver Morgan coins over the years and has been buying a few here and there. For me, this is investing a small amount weekly in certain stocks that I believe in and continuing to build the most important investment, my website.
Buying a little extra. Having certain food items such as frozen meat or canned goods that will last us can take the edge off in uncertain times. This is just in case of temporary unemployment, certain food items jump in price, or in case of temporary shortage.
Buying more locally and supporting local businesses. How does this help us and our financial situation? By supporting local businesses we help to ensure more local jobs and more of our money stays within the local economy. This can affect far more local people and businesses overall than just the one local company that you chose to shop at. Whenever possible we are trying to purchase items that we need locally and keep more businesses flourishing within our city of Toledo, Ohio.
Best ways to ensure your financial future
Analyze your own situation and determine your best course of action. This might mean something different for each person. Here are just a few ideas of areas that you might want to focus on currently depending on your current situation. Like I mentioned earlier we all should try to save more money, trim our budget, and bring in additional income. Also, investing can be done in many ways whether it is investing in yourself and learning something to make yourself more marketable, an investment in your current assets to keep them maintained, or actual financial investments. Remember investing is just putting something of value into something that you hope will have more value in the future. This can be in the form of money, time, work, etc. Don't underestimate an investment in yourself by gaining additional knowledge and skills. Hard work and patience can produce very valuable money-making potential in the future.
Make sure that you are doing the absolute best in your current job. Nothing helps you land a job or keep a job as well as good previous work history and being an asset to the company. When you are hard-working and willing to be flexible the potential for future growth is far greater. This doesn't mean that you are trying to one-up to your coworkers, it is trying to make sure your company is successful and that you are giving your personal best every day. If your company remains a success there is typically less need for layoffs and more potential for future opportunities all around.
Job loss: recognize the future possibility
In January 2019, I was facing a layoff with a company I had been employed at for many years. This layoff came less than a year after I transferred to a different department and took another position. This was a position that I viewed as a step forward and had the potential for professional growth. Within less than a year my world almost changed dramatically in a way I never expected. I was attempting to gain more knowledge and grow professionally but instead, I almost lost what I had worked to build for many years.
Throughout this experience, my eyes were opened and I recognize that the possibility of a job not being there tomorrow is always real. It does not matter if you work in what you believe to be an essential job today or if you have been employed with the company a long time. This led to me being better prepared next time I should be faced with a situation like this. In this post, I wrote directly after I was informed of the layoff coming I shared some important information for those facing a similar situation. I also shared some helpful tips on what actually helped me return to a job I had left within the same company in this post.
Preventing job loss in the future
Preventing future job loss in my opinion is almost completely impossible and can never be guaranteed. Why? Because as I mentioned earlier no job can ever be 100% guaranteed (unless you work for yourself). What you can do however is make sure that if or when this happens to you in the future, the effects will not devastate you financially. How can this be done you might wonder? The best way to guarantee that job loss in the future is less financially devastating is to prevent your weekly paycheck from being the only financial stability that you have.
Decreasing the devastating effects of future job loss
Make sure that you do not solely rely on your weekly paycheck to keep you going financially. This is why a savings account and emergency fund are such important parts of your financial health. When you lose a job and you have no income to fall back on the effects can be crippling. This does not have to happen and can be prevented in the future by focusing on saving more money.
Finding ways to build passive income. Passive income is income made passively without actively working. This can happen in many ways through Investing or through something that you do once that brings in an income forever. For a writer, this can be building a money-making website or writing a book. This might not be completely passive but can lead to passive income later on.
Paying off debt now and not accumulating more debt in the future can help decrease the harmful effects of job loss. The less debt that you have in the future the less income you have to bring in and payout monthly. Fewer expenses and fewer bills = less financial stress and anxiety overall.
Find ways to build your income more in the meantime. This can be done in various ways such as finding money-making hobbies or maybe even picking up a side job. Not every job is laying people off right now and not everyone is willing to do every job either. The more you are willing to work hard and do even the simplest tasks the more potential for the future income you can have. You could find either an additional work from home job or even a job helping others such as delivering food or groceries on the side. Many are not willing or able to take positions outside of the home during the current Corona-virus shutdown right now. Honestly many should not be due to health concerns but our economy cannot stop completely or we would have no way to obtain what we need to survive. Manufacturing, transportation, food-related services, healthcare, essential childcare, and other services must remain no matter what. These jobs are critical in keeping people alive and keeping our economy going. In taking on a job like this you are improving your own financial situation and helping the economy. These jobs are also important because in working many of these jobs you are giving back to others which in my opinion is always a positive thing. Zip Recruiter is a great website that you can use currently to locate available positions within your area.
Minimizing the effects of job loss
If you are among those who are currently unemployed keep in mind that you are not alone. If your unemployment is only temporary and you will have a job to return to you can absolutely count this as a blessing. I know because I have been on the side of losing my job and my husband has also experienced this just recently. Although both of our situations were temporary they still held financial, mental, and emotional implications.
Through our job loss and layoff experiences, I do believe that we have both become wiser and more prepared for the future. You can also and I believe you will rise from this in a way that you never expected.
What to do if you dealing with a job loss currently
Evaluate the situation is this layoff temporary or potentially a more permanent job loss. If you cannot answer this for sure prepare for the worst. Redo or create a resume for the first time and create a list of references now. The job market is tough at times and the sooner you start preparing and looking the sooner you could be employed once again. You never know this actually could result in a far better career move for you long term.
Accept that this happened and forgive yourself for any mistakes you may feel you have made. If you accept the reality of the situation then you can begin to move forward. Trust me. If you are like me you may actually go through a period of beating yourself up for the situation you are now finding yourself in. This job loss you are experiencing is most likely not your fault and you have no control over the outcome and never did. Realize that the future in front of you is what you should be focusing on and not any of what you may view as past mistakes.
Take action now! Do not wait. Prepare yourself today whether it is for job searching or whatever the future might hold. Do you need to call your debtors and notify them that you are unemployed? If so do it now do not wait. Do you need to get a deferment on your student loans? Call and make sure that your student loans qualify for the Corona-virus forbearance. Not every student loan does but if your loans do not qualify for this you might qualify for a deferment due to unemployment or loss of income. To do so you would typically need to request this and fill out paperwork. Do not wait only to be stuck with a student loan payment you cannot afford. Call the company that services your loan and get more information today.
My closing thoughts
I recognize that the term scary financial crisis may sound alarming, and preparing for one may seem intimidating. However, this is something that you can do. Just take it slowly one step at a time. If I can do it anyone can, don't give up, and remember each small step is moving you towards a better future.
