Recession or not, finding your way out of a financial crisis is important for future survival. We’ve seen homes foreclosed, old businesses being forced to shut down operations, and thousands of employees getting laid off. Though a more favorable financial climate could improve, given aspects that trigger the crisis, there are several people who, even when the economy is thriving in the U.S., have struggled to make ends meet or faced complicated and distressing financial crises of their own.
At times like these, when almost every worker is expendable, it is important that people take the time to invest in themselves. As more and more people suffer from aggressive layoff waves, rising numbers of unemployed fill the charts; therefore, investing time and money to improve the chances of keeping your job is the best thing to do.
The first thing that comes to mind during hard financial times is cutting expenses. Naturally, one might think that, in order to save money for more basic needs, trimming down only the unnecessary expenses is the best course of action. Part of a well-balanced financial plan is keeping your eye on how you use your money, whether you have a lot of it or not. Cutting expenses is always a good practice and one we should revisit more often than not to keep ourselves in line with expenditures. However, when we find ourselves in a financial crisis, there is one thing more important than cutting expenses – creating income.
Finding new ways to create income does not necessarily mean finding a second job. Though finding a new line of work to complement your day job is a great idea, there is a strategic complement to creating new cash flow into your wallet. Robert Pagliarini proposes a somewhat more radical approach on how to deal with paying your bills during times of financial crisis. Regardless of his opinion on whether we should be paying off our credit cards or not during hard financial times (he says we shouldn’t), he does make an excellent point: not only should we be looking to create alternative flows of income (providing services, taking on a second job, freelancing), but we should also invest in ourselves to increase our market value. But how do we do that?
In a more dynamic work market, where employees are either kept or laid off based on how many hats they can wear within the company, experience and alternative skills either make or break your opportunity for a new job opportunity or raise. With greater chances of achieving your goal of getting your first job, a better paid job, or a promotion within your department, the latest trend in the job market is being multi-skilled. Companies, these days, are looking for the best way to maximize fewer resources to remain in business, without adding to their expenses. When choosing from a pool of options, those who are more multifaceted will be perceived as better assets. For example, if you are in accounting but also know how to design a simple banner or email campaign, you are a two-for-one deal for your company, and that makes you a great asset.
With entire generations focused on attaining a particular degree in a given area, people in more traditional career paths have failed to diversify their knowledge. When in a tight financial situation, taking a class might be something you would cut off right away or not even consider. However, using $50 for a specific computer program class is not money down the drain; you can actually profit from your initial, one-time investment for years to come.
The key to wisely investing in yourself is finding new skills that will truly benefit you later on. Though taking piano lessons might be a lot of fun for you, it probably isn’t complementary to your current job in graphic design. However, learning how to use a new computer tool that will ease the design process will add to your list of assets and give you an advantage over those who don’t know the tool yet. It is a great professional practice to constantly update to new technologies and tools that are being used, inside and outside your area of expertise. That way, you will always be one step ahead of the rest and have the advantage in terms of professional growth. Remember, a small amount of money invested in newly acquired skillsets is a worthy expense.
When speaking of saving, a lot has already been said and done. Some might be big spenders without any money put away, while others manage to keep their emergency fund intact for its intended purpose. With hundreds of methods for saving, it is always a good idea to go over the following simple steps that will ease the process of saving and keep those funds untouched until a the need arises.
There are certain expenses that are harder to cut down or out: rent, utilities and food. However, when shopping for food during a financial crisis, keep in mind you should be shopping for food that is essential but not items that are clearly indulgent. You should focus your shopping efforts on food items that can keep you satisfied for longer periods of time and that don’t cost a fortune. These items may include rice, beans, chickpeas, or lentils, preferably those that are not ready to serve. Natural foods are cheaper, stay fresh longer, and usually come in larger bulk containers and bags. Though living on rice, beans and chickpeas might not always sound appetizing, we are discussing how to survive a financial crisis; when better times come, you can go back to buying your usual foods if you wish. You money should be used, again, for grocery essentials. Make these, and other similar expenses, your first priority during a financial crisis.
While there are expenses you can’t completely eliminate, there are many on which you can probably reduce the amount you spend. Those may include transportation or social activities, like lunch or dinner at a restaurant. If you are unable to eliminate having lunch or dinner out, find a way to minimize these expenses by either cutting down the number of times you indulge in restaurant food or find more affordable, wallet-friendly places that serve value meals or lunch specials at a more affordable price. Think of your habits versus your needs and find areas in which you can shrink the amount of money you spend.
Last but not least, there are things you can live without, that are totally unnecessary and should be eliminated altogether. Go through your credit card statements and bills. You are sure to find more than a few items you could do without that are actually eating into your paycheck every month. Your pet is a great source of expenses, for example. If you are a proud pet owner, you are more often than not changing your pet’s bed, buying them new toys, and sometimes even getting them clothes to make them look even cuter. Stop! Go through your pet related expenses and check for a comfortable, long-lasting bed, good quality food, a couple of food and water bowls, a collar, leash, and scheduled visits to the vet. Other than those, you should not need to spend anything else. Like pets, there are several other aspects of our lives where we can save more. Find them; stop overspending, and save that money.
Personal or national, a financial crisis can leave you with a lot of free time. With high unemployment rates, a significant amount of the population has found themselves jobless and with time to spare. Lounging around the house, browsing the newspaper or employment websites and then lounging again can soon get boring and frustrating. Instead of wasting time worrying about not having a job, many Americans have become self-employed and started earning new income from alternative lines of work. Even those who have been able to hang onto their day jobs can add a second job to fight off the crisis. Whether you’re an accountant turned baker or a developer turned carpenter, using alternative skills to provide a service is a great way to use the rest of your day in a productive fashion. If you still have your day job, distribute the rest of your hours wisely. Choose an alternative line of work that considers the following:
This checklist can apply to a number of services from babysitting to carpentry to baking. Define a process that works best for you and then deliver a good end product. Having enough money to get you through the month without any major damage to your health, your wallet, and your credit can be tough in a time of crisis. Parallel to your efforts of making more money, you should prioritize your bills and take action.
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