Money Matters: Tips to Keep You Financially Healthy in an Economic Crisis
We’ve all seen the absolute mess that ensued once the COVID-19 pandemic shut the doors on businesses across the globe. And, while many of us experienced this as our first global crisis, this was not the first time in history when an economic crisis befell the country.
Truth be told, the United States has weathered many financial crises. We can look no further than 1929, during the stock market crash that ushered in the Great Depression. More recently we can see that the financial crisis of late 2008 caused the bankruptcy of our largest banking institutions, and caused thousands to lose their retirement savings.
As COVID-19 shut down businesses worldwide, many investors and business owners found themselves scrambling to try and make ends meet.
Whether these efforts were as simple as obtaining a quote to find cheaper auto insurance, to downsizing their entire workforce altogether, when a crisis hits, sometimes you have to make tough decisions.
Where to Cut Costs
If you’ve been hit with any financial difficulty in the past, you know that the first things to go are unneeded expenses.
Sure, you might thoroughly enjoy your Saturday movie and date night where you allow yourself to splurge on a few things. But, you can’t weather a financial crisis and still expect to frivolously spend money.
Often, people are unwilling to sacrifice the lifestyle they’ve built and grown accustomed to. However, not only is this being stubborn, but it’s also financially irresponsible.
Look to the areas where you can save instead of spend. Eating take-out throughout the week? It might be time to pack a lunch for a little while to save money. Entertainment packages are also considerations that you might want to eliminate. Everybody loves Netflix binging from time to time, but you might want to cancel a few of your streaming services until the finances pick back up.
No matter how you cut costs, the point is to eliminate all unnecessary spending for a short time period, or at least for enough time to get you into recovery mode.
Sell and Trade
As a business owner, perhaps you’ve accumulated a few assets. If you’ve found yourself in an economic crisis, or even in a bad financial year, you could liquidate your assets or trade or sell them in order to stay afloat.
Maybe you have a company car or a work vehicle that you could sell. Perhaps you have a property that could be sold, or any equipment around the house that you could trade or sell.
The idea is to bring in as much money as possible during the crisis in order to help you keep your head above water during difficult financial straits. This means cashing in on all of that “stuff” you’ve acquired over the years.
Know When To Cut and Run
Now, this isn’t about giving up or shutting down completely. But, when you’re faced with a seemingly impossible situation, you might need to put your business venture on hold for a short time if you don’t have the backup capital to stay in business during hard times.
Large corporations have the money and resources in many industries to operate at a remote level. As we’ve seen with the COVID-19 pandemic, many businesses and storefronts had to think outside the box just to stay in business. For example, restaurants opened for take-out only and some businesses only allowed a certain number of customers into the building at a time.
If you find yourself lost after cutting all possible costs, rather than go into debt completely, maybe it’s time to find a full-time alternative as a means for making money.
Hard times find their way into our lives, and many times these are situations that couldn’t have been avoided. If you have a sharp business mind, dealing with these financial difficulties can be a cinch. But, for others, it’s a game of many moving parts.
As long as you’re able to pay your bills and care for yourself and your family, your business plan will simply have to be modified. Even if this means shutting your doors temporarily, you’ll be able to recover quicker if you use good, smart business sense when handling your affairs.
